A user can stake PRISM into the xPRISM pool and receive xPRISM tokens in return. The xPRISM tokens they receive represent their ownership share of the total PRISM tokens in the xPRISM pool. Fees the protocol levies are used to buy PRISM tokens on the decentralised exchange and those PRISM tokens are distributed into the xPRISM pool. As a result the exchange rate between xPRISM:PRISM increases in the same manner as aUST:UST. With time, holders can burn their xPRISM and redeem a greater number of PRISM tokens in return, enabling depositors to collect rewards simply by holding xPRISM.
xPRISM Exchange Rate = (PRISM In Pool) / (xPRISM Supply)
When rewards are claimed (minimum once per day) and converted to PRISM on the AMM, the purchased PRISM is placed into the xPRISM pool which means the value of xPRISM increases relative to PRISM because the exchange rate is increasing according to the above formula. This is because xPRISM is a claim on the total amount of PRISM in the xPRISM pool and as more PRISM tokens are added into the pool from fees, the more PRISM tokens the xPRISM holder has the right to claim.
xPRISM received = (PRISM in) / (Total PRISM in pool + PRISM added) x (xPRISM supply)
If a user no longer wishes to receive rewards or participate in governance they can start the 21 day burn of their xPRISM to receive physical delivery of their share of PRISM in the xPRISM pool. The amount of PRISM received is calculated by the following formula:
PRISM out = (xPRISM burned)/(xPRISM total) ×Total PRISM in pool
Or alternatively the user could choose to swap their xPRISM for PRISM on the PRISM Swap decentralised exchange.
mint_xprismexecute message bonds PRISM for xPRISM at the current exchange rate.
Execute the following message against the PRISM token contract.