What is nexPrism, what is the nexPRISM lockdrop, and why would you participate?
With less than 24 hours left till the Lockdrop deposit phase, we prepared a guide to help you make the final decision.
What is nexPrism?
In order to understand nexPrism, it is important to understand the base framework for xPRISM and AMPS. Check out this link for information on the subject. Once you’ve checked this out, return here to continue learning about how nexPrism works, and why it’s of massive importance to the Prism and Nexus ecosystems.
From a users perspective nexPrism will consist of 2 separate vaults — 1 for yLuna, and the other for xPRISM. The goal of nexPrism is to create a ‘convex style’ framework on top of Prism Protocols xPRISM staking framework. In simple terms the idea will be to accumulate many AMPS within the nexPrism vault, and optimize / monetize those AMPS for users. This will have the effect of automatically pairing a users AMPS or yLuna with the optimal amount of the supplementary asset on an ongoing basis. This will work thru a yield redirection strategy whereby the nexPrism vaults will push more yield towards whichever asset it needs more of to provide optimal rewards.
For example: Let’s say the nexPrism vaults have too much yLuna and not enough xPRISM to provide optimal yield to either set of depositors. In that case the vault will push more yield to the xPRISM depositors to incentivize more deposits. The vault will calculate these balances and automatically adjust every 8 hours.
If you understand the framework for AMPS, you’ll understand that In order to achieve optimal yields for your yLuna and xPRISM, you need to have the optimal amount of each asset on an ongoing basis. Maintaining this balance manually over time can be exhausting and may require you to take on unwanted exposure (either having to buy yLuna, or xPRISM).
nexPrism solves this problem by removing these manual components from the equation, including the AMPS claiming process, and removes the need for individuals to absorb potentially unwanted additional asset exposure in the form of yLuna or xPRISM.
The Lockdrop… Why is it needed? What are the considerations?
Why is it needed:
In order to bootstrap nexPrism, Nexus needs to create a LSD (liquid staked derivative) LP for xPRISM. Fundamentally xPRISM cannot be unstaked without the destruction of AMPS, but if you build a LSD on top of xPRISM which tracks the value of underlying xPRISM, it’s possible to afford users liquidity on their xPRISM exposure, without the destruction of AMPS (Ala nexPRISM). In order to make this work, Nexus needs to accumulate a decent sized position in xPRISM to bootstrap the creation of the nexPRISM/xPRISM LP pool. This is the answer to “Why is the bootstrap needed”.
What are the considerations?:
For users, the decision to participate in nexPrism lockdrop may depend on each users’ situation. For many users, especially if you are medium to long term bullish on PRISM itself, it makes total sense to participate in nexPRISM lockdrop. For some, the decision is quite subjective, that you will have to act with your gut feeling almost. Refer to the table below for the rational choice per user group :
For those who has already been wisely utilizing xPRISM AMPing with yLuna, it is truly difficult choice to make. An easy option for such case is to participate lockdrop with farmed PRISM or even ape more PRISM. If you are worried that your yLuna will be left lonely without boosting by stop AMPing; worry not, yLuna vault will be opening soon after Lockdrop finishing.
One thing to highlight is that nexPRISM lockdrop participants will receive nexPRISM-xPRISM LP, which will be an actively used pair throughout the nexPrism’s entire operation (thus could expect decent transaction fees), made with two auto compounding token. nexPRISM-xPRISM LP could be one of the best way to grow your PRISM bags
Also, note nexPRISM lockdrop rewards is ROI, not APR (it’s not annualized return, it’s actual return that you will be rewarded for this specific action)
Conclusion:
Hopefully this gave you more clarity on nexPrism and helped you make a final decision on whether or not you want to abandon your current AMPS to join in on the lockdrop. We understand there is a lot of information, but you will make the rational choice we believe.
