nexPrism (Nexus Boosted Prism Farming) details

In follow-up to the introduction of Nexus Boosted Prism Farming, which we named it nexPrism, following is details of the nexPrism’s design and architecture. nexPrism involves new native token, nexPRISM.

Highlighting the core parts of nexPrism per user group:

For xPRISM holders

- nexPRISM Minting
Users convert xPRISM into nexPRISM via Nexus xPRISM staking vault. Staking process is irreversible. Minted nexPRISM is automatically staked to nexPRISM Staking. Users may unstake nexPRISM to sell (for exit). Only staked nexPRISM will be rewarded. All depostied xPrisms will be pledged to Prism’s AMPS vault to acquire AMPS.

- nexPRISM Staking
nexPRISM holders must stake their nexPRISM in order to receive a proportion of additional PRISM farmed by yLuna yield boosting. As Prism’s yLuna farm provided farmed PRISM token with 30 days lock, the additional rewards will be distributed once the tokens are unlocked in a form of xPRISM.

- nexPRISM-xPRISM LP
nexPRISM-xPRISM LP will be created on Astroport with suitable amplifer as a stableswap. Such liquidity pool will provide liquidity to nexPRISM holders, allowing them to enjoy both boosted yield and liquidty. Keeping the nexPRISM to xPRISM peg would be vital to nexPrism expansion, and the attractiveness of the nexPRISM in terms of yield, would be the main natural force to maintain the peg. (As how cvxCRV to CRV peg is well kept). For liquidity provider, nexPRISM-xPRISM will be a pair with minimum impermanent loss risk made with both capital efficient form of PRISM token; perfect if you are bullish on PRISM tokens.

For yLuna holders

- yLuna Nexus Vault
yLuna holders may choose to deposit yLuna at Nexus yLuna vault for higher yield than yLuna staking or yLuna farming without pledged xPRISM. As Prism’s yLuna farm provided farmed PRISM token with 30 days lock, the rewards will be distributed once the tokens are unlocked in a form of PRISM.

For Psi Stakers

- nexPrism Buyback
nexPrism will be in direct benefit to Psi stakers as they will receive a proportion of boosted yield created in the system. (Initial parameter being 5%, which can be adjusted via Nexus Governance proposals). Rewards from the yield will be provided in nexPRISM, providing additional mechanism to better keep peg between nexPRISM and xPRISM. We believe such reward distribution is a logical model as better the nexPRISM’s peg is kept, more nexPRISM may be minted, meaning more rewards for Psi stakers. We believe such rational win-win rewards model between the protocol that Nexus’s vault is built upon and Psi stakers, would benefit the Nexus Protocol in long term.

Yield Distribution

nexPrism has dynamic yield distribution adjustment system, because the right balance between the AMPS and yLuna would maximize the overall yield. As number of total AMPS and farmed yLuna may constantly change, in order to attract the ideal composition of AMPS and yLuna, the yield distribution will be regularly adjusted per 8 hours, depending on which asset is in deficit in comparison to the ideal composition. Such mechanism will ensure that Nexus provides ideal vaults for xPrism and yLuna holders to maximize their yield.

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Thanks for the detailed write-up, @realshimmy. I have a few questions with regards to your diagram above:

  1. For Psi stakers, what do you mean by “Rewards from the yield will be provided in nexPRISM”? To confirm, for Psi stakers, 5% of the yield from both base + boosted Prism pool will be directed to Psi via airdrop or via a claim button and the yield is paid in staked xPrism (nexPRISM)?
  2. Since nexPRISM has two utility, either to stake into nexPRISM Staking or sell it off via nexPRISM-xPRISM LP to obtain xPRISM, does it make sense to have all unlocked nexPRISM to be auto-staked by default? This way, should the user decides to exit, they could withdraw the nexPRISM from nexPRISM staking to swap it back to xPRISM.
  1. For Psi stakers, what do you mean by “Rewards from the yield will be provided in nexPRISM”? To confirm, for Psi stakers, 5% of the yield from both base + boosted Prism pool will be directed to Psi via airdrop or via a claim button and the yield is paid in staked xPrism (nexPRISM)?

Yes, the rewards (nexPRISM) will be directed to Psi stakers, so that they can claim it on Nexus frontend. Our initial design was to charge 10% only on boosted Prism yield, as it would be more rational method to apply performance fee; however as it’s difficult to seperate and track base and boost yield at the moment in current Prism smart contract design, we had to change it to more generalized fee model. The fee amount ofc can be adjusted via governance in future.

  1. Since nexPRISM has two utility, either to stake into nexPRISM Staking or sell it off via nexPRISM-xPRISM LP to obtain xPRISM, does it make sense to have all unlocked nexPRISM to be auto-staked by default? This way, should the user decides to exit, they could withdraw the nexPRISM from nexPRISM staking to swap it back to xPRISM.

If it;s for Psi staker rewards; I think that totally makes sense; we will implement it that way if there’s no technical issues (like gas fee et al)

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  • I think generally being paid in nexPrism as Psi staker feels a bit off. Most people would likely just get nexPrism dust that will be meaningless. It complicates taxes. For small stakers it will be not profitable to even claim, swap, stake it due to tx costs.

  • Does Prism provide anything back to Nexus? This is incredible value add for Prism.
    – Nexus is paying 25m psi tokens to incentivize this, which is worth 1m USD.
    – Nexus is getting people to lock xprism forever and getting more yLuna deposits that will be buying back prism, increasing revenue for prism.
    – Nexus takes fee in nexPrism, meaning we are taking prism emissions and convert them to forever locked staked variants, removing it from circ supply. So nexus not only never sells any prism, it actually reduces prism emissions.
    What does nexus get? Can they incentivize xPrism-nexPrism LP? Do a seed xprism contribution to help with the AMPS boosintg?

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It may from the surface looks like its a little off to be paid in nexPRISM for a PSI staker, but under the hood, it will make sense.

Reason 1
For rewards to be paid out in PSI, there will be at least 4 swaps:

  1. nexPRISM - xPRISM
  2. xPRISM - PRISM
  3. PRISM - UST
  4. UST - PSI

For communities that are bullish for both Prism & Nexus, the number of swaps will eat up much of the rewards. Therefore, should users decide to make the swap, they could choose to do so.

Reason 2
Prism Protocol is considered a primative which many dApps will be built on top of it. Imagine the trading volume of refracted LPs, governance tokens & fixed term refracted tokens that will mimic the treasury markets. With the vast amount of trading activity done on Prism assets in the future, Prism will drive the value back to PRISM stakers.

It is opportunistic for Nexus to acquire vast amounts of PRISM while most protocols are focusing on the Astrowars at the moment to capture as much PRISM into its protocol with $1mil Psi lockdrop. On the surface, it might seem like its a small amount, but bear in mind, Astro wars have significantly inflate the rewards that protocols need to dish out to attract ASTRO tokens since its a 5-way fight (for now). Nexus is in prime position to capture PRISM for the future growth of Prism as a primative.

Back to your question of whether Prism provide anything back to Nexus? No & Yes.

No, because Prism doesn’t incentivise Nexus users for locking up Prism into its protocol, and it shouldn’t be seen as supporting a protocol directly to foster competition (if any).

Yes, as Prism stakers (Nexus in this case), will be entitled for the protocol revenue share. You can think of it like dividends to the shareholders of Prism. And as a shareholder of Nexus, you get a share of the dividends of Prism.

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For rewards to be paid out in PSI, there will be at least 4 swaps:

  1. nexPRISM - xPRISM
  2. xPRISM - PRISM
  3. PRISM - UST
  4. UST - PSI

That’s not true. Rewards are acquired in Prism tokens.

At the moment nexus will:

  • Gain yield in Prism
  • Stake it to xPrism
  • Stake it to nexPrism
  • Give nexPrism to stakers

vs

  • Gain yield in Prism
  • Swap to UST
  • Swap to Psi
  • Give to psi stakers

So on complexity level, it’s not harder to do 5% buybacks instead of 5% nexPrism.
Paying in nexPrism is actually harder as it will require new UI to claim it.

Reason 2

I understand the 5% fee. But I don’t feel like that’s a good exchange. We are diluting all $psi stakers by giving 25m psi tokens in 3 months.

Especially because we are not doing buybacks, we are benefiting Prism protocol by taking this fee. We take their emissions and forever lock them in staking, while increasing our emissions.

I think Prism should at least bootsrap nexPrism vault. They could dedicate some of their “Marketing/Parnerships/Whatever” supply for this. It would not increase circ supply, the tokens would be forever locked. And nexus would own a decent chunk of nexPrism from this that would give us AMPS and incentivize the yLuna deposits better. And as the only value taking we do is from the yield on yLuna, it would benefit psi stakers.

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I think the main point that you are not considering is the following :

giving nexPrism to Psi stakers is a great way to sustain long term growth of this product.

Not only Nexus’s AMPs will increase in time ( because of the nature of AMPs), but also the xPrism amount will surely increase over time because 5% of the Prism rewards will always be converted into xPrism and then deposited in the Nexus vault.

More xPrism over time means a faster than linear growth of AMPs. And more AMPs meaning more attracting APRs for both xPrism and yLuna holders.

Our design choice support a long term virtuous cycle

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For small vol. stakers; I think this defo could be a valid point; we can add on automatic Psi buyback feature on top of the current model in future, in order to better provide value back to small vol.stakers. However in terms of rational basic design; I think it’s better to provide rewards in nexPRISM or other PRISM related tokens because it’s the most scalable system imo.

And if you consider extreme cases; changing fee parameter, allowing nexPRISM to be unstaked into xPRISM; it’s all in control of Nexus governance; aka Psi stakers. (So if Psi stakers are not in favour, they can always raise a proposal to change the buyback system; the team will fully support proposal making & dev support if the proposal is passed) Thus I think the rewards token form is a relatively a small part, unless we could suggest a model to wrap the entire yield into Psi buyback as how we are doing it for Anchor.

So on complexity level, it’s not harder to do 5% buybacks instead of 5% nexPrism.
Paying in nexPrism is actually harder as it will require new UI to claim it.

This is true @Max :smiling_face_with_tear: it defo was more effort on ourside.
Even with the additional effort, we came up with this design, because we belive this is more scalable solution that can kick off virtuous cycle. And since the key to the success of the nexPrism is 1) nexPRISM competivness in terms of yield 2) nexPRISM-xPRISM peg; setting the incentive aligned to the Psi stakers, who in fact own this protocol, was important we felt.

I think Prism should at least bootsrap nexPrism vault. They could dedicate some of their “Marketing/Parnerships/Whatever” supply for this. It would not increase circ supply, the tokens would be forever locked. And nexus would own a decent chunk of nexPrism from this that would give us AMPS and incentivize the yLuna deposits better. And as the only value taking we do is from the yield on yLuna, it would benefit psi stakers.

Fair & good point; we will make the case to Prism team and ask whether this can be arranged.

Hey, yeah, I made a mistake on the Reason 1 part on the swaps. The model is to suck in as much xPRISM as it could to have a greater share of governance on Prism.