Summary
The Prisma core contributors propose the introduction of PrismaLRT and its native, decentralized, LRT collateral-backed, USD pegged stablecoin, $ULTRA.
With community support, PrismaLRT will launch under Prisma, allowing users to mint $ULTRA against liquid restaking tokens (LRTs). As described below, all decisions relating to PrismaLRT will be in the hands of the Prisma DAO.
If approved, the introduction of PrismaLRT and $ULTRA allows Prisma to tap into the growing LRT market and generate additional revenue for the Prisma DAO by sending 100% of the fees to the DAO.
Introduction
Recent excitement in EigenLayer and restaking has seen a surge in the popularity of a new asset class called Liquid Restaking Tokens (LRTs). Empowered by EigenLayer, several new liquid restaking protocols have emerged providing access to additional yields from restaking.
To date, liquid restaking boasts an impressive TVL that surpasses $3 billion with several notable protocols like Ether.fi, Renzo, KelpDAO, and Swell building on top of EigenLayer.
However, LRTs are facing the same problems LSTs experienced when Prisma was being built: what do you do with your LRT once you have it?
Introducing $ULTRA, sound money backed by LRTs native to Prisma.
How would ULTRA work?
When live, PrismaLRT will be available in the same dApp as Prisma. Users will be able to choose which collateral view they want to access.
As a decentralized stablecoin on the Ethereum Mainnet, $ULTRA will be minted by users (borrowers). As with all borrowing on Prisma, a user must supply collateral (at a specific collateral ratio) to be able to mint $ULTRA. Correspondingly, when a user repays a debt position (or is liquidated), PrismaLRT protocol burns that user’s $ULTRA. All the fees and interest accrued by minters of $ULTRA would be directly transferred to the Prisma
FeeReceiver.
Protocol parameters
Following the introduction of PrismaLRT, the DAO will be able to determine protocol parameters and change them over time through a governance process similar to the process of changing parameters for Prisma. This means that $ULTRA’s monetary policy will be controlled in a decentralized way by Prisma governance.
Community Snapshot Votes
A snapshot will follow this PRFC to determine whether the community wants to move forward with $ULTRA.
If the community votes positively for the deployment of the protocol, it will create the ability for users to mint $ULTRA.
Launch collateral parameters can be changed through governance over time with contributors such as PrismaRisk and others potentially playing a key role.
As the launch is time-sensitive, this proposal will be followed shortly by a Snapshot vote. If the DAO vote is positive, the goal will be to launch before the next epoch.
Conclusion
This PRFC is focused on introducing and getting community feedback on the deployment of PrismaLRT and its native LRT-backed stablecoin, $ULTRA.
ULTRA will be:
- Decentralized
- Over-collateralized by LRTs
- Governed by the Prisma community
We look forward to hearing community feedback on ULTRA and all aspects of this proposal.