Prisma Finance, a lending protocol, first pulled up the debt ceiling to $10 million within 2 hours of its early operations. Now, reports have surfaced citing that the achievement has targeted the $30 million mark. It is notable for a protocol that went live on the first day of September 2023. That achievement is praiseworthy, mainly because it has come with mkUSD, a stablecoin backed by liquid staking tokens (LSTs).
Moving forward, Prisma Finance has expressed its commitment to raising the borrowing limit in the coming days. The cap was secondarily raised to $20 million and finally to $30 million on September 15, 2023.
The stability pool is largely keeping demand stationary. It has managed to bag mkUSD worth approximately $21 million. The said pool is leveraged when settling the debt and claiming collateral from the user. It is diverted to the pool of inspiration from Liquidity’s mechanism. ETH backs its LUSD stablecoin, and a debt is settled only when liquidation is needed.
Interestingly, the PRISMA token is yet to go live, but the community is looking forward to its launch as the token brings with it the prospect of participating in governance. The extent of participation is now defined by anonymous representatives of Prisma Finance, who have stated that the community controls almost all aspects.
What makes the protocol an in-demand commodity is the ideology of considering developers as users at the time of making advancements. Prisma Finance has said that it was obvious to do so anyway since they all participate in DeFi and hold LSTs.
LSTs are playing an equally important role. They are represented by staked ETH, with the sector having almost 12 million ETH at a total price of $19 billion. All of it is deployed in liquid staking tokens.
The launch of stablecoins has also gained momentum. For instance, Curve and Aave have launched their respective digital tokens to follow the trend of Maker and Frax. It only makes sense for Prisma Finance to come up with PRISMA, a token model that Curve powers.
PRISMA tokens will help the holders of vePRISMA direct the reward to those minting the additional stablecoin debt, mkUSD. Holders of vePRISMA will be eligible to earn more rewards for PRISMA.
Simultaneously, Polygon has announced that it will migrate to a new token by the fourth quarter. The migration involves a shift from MATIC to POL and introducing a Staking Layer Development. The announcement dates back to September 13, 2023, as a part of the new Polygon Improvement Proposals, also known as PIPs. However, this is based on the assumption that the community changes its demands only in a minimal sense.
Prisma Finance has so far pulled the debt limit to $30 million from $10 million. There was a milestone of $20 million, which was surpassed in the middle of this month. Prisma Finance plans to further break the barrier in the coming days.