[Proposal] nexPrism launch & lockdrop

In order to bootstrap nexPrism’s launch, we propose lockdrop event with following details.

Lockdrop bootstrapping target : nexPRISM-xPRISM LP
Lockdrop rewards : 25M Psi, to be vested linearly over 3 months

Logic behind the target

nexPRISM-xPRISM LP will be a vital part of nexPrism. Sufficient liquidity out of nexPRISM would minimize the nexPRISM minters risks, thus provide less barrier of entry. nexPrism’s success will heavily depend on how many nexPRISM that we manage to attract to be minted. In addition, 50% of the LP token will be initially composed of nexPRISM, thus also providing bootstrapping effect on acquiring sufficient AMPS to attract yLuna holders; starting virtuous cycle.

Logic behind the lockdrop

As 13% of the total PRISM is allocated for yLuna farm event, which nexPRISM will be targeting, there’s still more than 100M PRISM tokens left to be farmed over the course of 10 months. At current valuation of PRISM at 0.58, the rewards to be farmed is over 60M UST; if Nexus manages to attract sufficient volume of nexPRISM, AMPS structure will jump-start virtuous cycle for Nexus to be able to have unchallenged comparative advantage to be able to provide boosted yield to more users efficiently.

Proposed reward source & size

We propose to utilize a proportion of the redirected airdrops by poll 16, as the purpose of the token inflation is a good fit & the proposed size of lockdrop is considerably lower than the original inflationary pressure from airdrop (25M psi is about 5 weeks worth of airdrop, which will be spread out over 3 months to be distributed)

nexPrism Launch

we propose to launch nexPrism, once the lockdrop is finished; opening nexPrism & yLuna vaults

3 Likes

With the revelation that the fees are not used for buybacks of psi, I’m not sure how I feel about the 25m emissions of psi for xprism stakers.

  • We are diluting Psi token holders by emitting 25m tokens over 3 months.
  • These tokens at the moment are worth same amount as entire Nexus treasury
  • We are providing a lot of value to Prism by creating a mechanism that locks xPrism forever
  • We are providing a lot of value to Prism by permanently locking 5% of Prism emissions(that go through this vault) in a form of nexPrism
  • Each yLuna that would come to this vault due to higher yield, when they wouldn’t be staking yLuna otherwise, will give Prism 9% yield that is used to buy back Prism and benefit Prism stakers
  • If we assume 30% APR on yLuna in this vault, the Psi stakers would get 1.5% yield on each yLuna
  • So not only Nexus would generate 6 times more yield to Prism than it does to Psi stakers, the yield to psi stakers actually beneifts Prism as the yield is paid in forever-locked Prism, while the yield Prism makes is used to buyback their token.

With all of this, I don’t think the 25m PSI emissions are fair in this. It feels like we are getting short end of the stick here, literally diluting ourselves and bringing significant value to Prism for little in return.

I would feel a lot more comfortable if Prism at least matched the emissions, e.g. 1m worth of Prism dedicated to xprism-nexPrism LP, so the offering becomes more attractive and we get more TVL(making that fee we get worth more).

1 Like

As 13% of the total PRISM is allocated for yLuna farm event, which nexPRISM will be targeting, there’s still more than 100M PRISM tokens left to be farmed over the course of 10 months. At current valuation of PRISM at 0.58, the rewards to be farmed is over 60M UST;

This doesn’t check out. So we are paying 1m UST in Psi tokens for this. We need a 3rd of all yLuna to be in our vault, just to get back the 1m UST with the 5% fee. We are almost guaranteed to emit more value than we generate to stakers. If we get ALL yLuna emissions, we make only 3m UST to stakers. No way we are acquiring all of yLuna, and even if we did this impossible task the benefit is only 2m worth of value to stakers while taking on big risks.

Would it be reasonable to significantly reduce the Psi emissions here? Maybe 10m instead of 25m?

1 Like

I’ve intentionally only addressed the total rewards to be farmed because 5% fee parameter is suggested as initial parameter that we considered to be at the lower end, in effort to bootstrap the new product. One of the reason for the heavy bootstrapping in the initial stage is

  1. nexPrism’s AMPS accumulation would not be linear, but exponential considering potential virtuous cycle of: more nexPrism → more AMPS → more yield boost for yLuna → more yield for nexPRISM → more nexPRISM
  2. nexPrism involves no other inflationary pressure than lockdrop, and it has potential to be a new sustainable revenue source, if Prism protocol keep AMPS model for their future farming opportunities, which they do have plan to do so atm
  3. Current base : boost rewards weight is 4:1, which is planned to be re-weighted towards more weight on boost rewards. This means that the additional yield created by the system will be less in the initial phase, but will grow in future. Thus once nexPrism accumulates more AMPS, and more weight has been weighted to boost rewards, Nexus governance could make a proposal to adjust fee parameters so that we are still providing efficient and market’s best rate for nexPRISM and yLuna vaults (more yield, greater the fee), but receive sufficiently high rewards to bring additional value to Psi tokens
  • We are diluting Psi token holders by emitting 25m tokens over 3 months.
  • These tokens at the moment are worth same amount as entire Nexus treasury

I think your are referring to 1M ust worth of ‘accumulated treasury’, which is composed of nAssets & Psi-UST LP rather than the entire Nexus treasury, which have quite a significance sum of Psi. & We are utilizing redirected airdrop amount from ANC staking, 25M is 5 wks worth or airdrop.

  • We are providing a lot of value to Prism by creating a mechanism that locks xPrism forever
  • We are providing a lot of value to Prism by permanently locking 5% of Prism emissions(that go through this vault) in a form of nexPrism

I defo agree on this; nexPrism could be win-win positivie sum for both Nexus and Prism

  • Each yLuna that would come to this vault due to higher yield, when they wouldn’t be staking yLuna otherwise, will give Prism 9% yield that is used to buy back Prism and benefit Prism stakers

yLuna farming yLuna is staked via yLuna farming contract I think; better to check with Prism team on this tbh

  • If we assume 30% APR on yLuna in this vault, the Psi stakers would get 1.5% yield on each yLuna
  • So not only Nexus would generate 6 times more yield to Prism than it does to Psi stakers, the yield to psi stakers actually beneifts Prism as the yield is paid in forever-locked Prism, while the yield Prism makes is used to buyback their token.

5% fee parameter is suggested as initial parameter that we considered to be at the lower end, in effort to bootstrap the new product. Please refer to the answer above for more details