PRISM Overview

Just as a glass prism splits a beam of light into separate colors, PRISM enables investors to split a yield-generating asset into its most basic components: a Yield Token (YT) and a Principal Token (PT). These new assets will allow users to isolate the exact risks they wish to speculate on or protect against.
By creating a new marketplace to trade these Principal and Yield Tokens, PRISM empowers users with new opportunities, including the ability to:
  • Borrow with no liquidation risk or daily funding costs by monetizing an asset’s future yield.
  • Swap variable-rate yields to fixed-rate yields.
  • Take leveraged exposure to an asset’s price or yield.
  • Manage exposure to currency risks by converting future yield instantly into any Terra stablecoin.
  • Participate in capital-efficient liquid staking to receive physical delivery of all staking rewards including airdrops, while being able to trade these assets instantly or deploy them elsewhere in DeFi.
  • Gain or swap exposure to other yield-bearing assets through the PRISM marketplace.
  • Automatically claim all airdrops in PRISM with no need to access any other protocol.
  • Reduce the administrative burden of compiling and reporting yield income and airdrops.
PRISM introduces ultimate composability, enabling users to trade an asset’s yield and principal components on the open market and to optimize bespoke strategies for their individual needs.
Figure 1: Luna Example