What Prism? How Prism? Why Prism?

Okay, but what in the world is a "Prism"? How does it work? and why should I care?

Good questions. Let's do a shallow dive into Prism then relate it to what I'm doing with LPs on @TeamKujira, shall we?

Narrator: SHALL we? 🙄

me: Yes, we shall.

Prism was this really neat idea that a protocol token, originally $LUNA, could be 'refracted'/split into two tokens of its principal ($pLUNA) and yield-bearing ($yLUNA) parts.

You could use those tokens individually, e.g.: swap them, stake them, or use them for various LPs.

Furthermore, you could 'bond' $LUNA to $cLUNA ('composite' $LUNA or a Prism-y LSD of $LUNA) and do the same kinds of things.

That means from one token, $LUNA, you had 4 tokens, $LUNA, $pLUNA, $yLUNA, and $cLUNA, all at varying price-points.

The arbitration opportunities, folks!

What arbitration opportunities? We'll get to that, but first, let's complete the Prism operations on tokens for (Turing) completeness.

Eheh. 😅

• The dual of bonding is 'redeeming' $cLUNA to $LUNA over 21 days.

• The dual of refracting is 'merging' $pLUNA and $yLUNA into $LUNA.

There were other features: the $PRISM token, staking, $AMP tokens to supercharge yielding protocols, a DEX to swap between any of the tokens (helpful if you didn't want to wait 21 days to burn $cLUNA to $LUNA), various kinds of LPs (PRISM-whatever, LUNA-whatever).

They were neat.

Arbitration Opportunities

But what could you do with all this?

It turns out: a lot.

If you refracted, say, 100 $LUNA to 34 $pLUNA and 58 $yLUNA today, then today, 100 $LUNA = 34 $pLUNA + 58 $yLUNA, and you would hope the TLVs of both sides were equal, as well.

Tomorrow, however, everything changes.

For the case of Prism, it turned out people valued the yield-tokens ($yLUNA) much more highly than the principal-tokens ($pLUNA), and the prices of both soon reflected that preference. People would swap all their $pLUNA to $yLUNA then stake the $yLUNA.

An unforeseen consequence that led to: when you merged your $pLUNA and $yLUNA back at some later time, the merge would be (very) inexact, you might merge 12 $yLUNA only for your $pLUNA and would get a different amount of $LUNA out of that merge.

Thus we have arbitration.

A specific arbitration tried was:

1. 100 $LUNA refracted to $yLUNA and $pLUNA
2. swap all $pLUNA to $yLUNA
3. wait (days, weeks, whatever)
4. swap $yLUNA back to 115 $LUNA

That was one of many, MANY arbitration-approaches. There was even a site that enumerated all variants.

Okay. Prism came, it was awesome for a time.

Why should we care now?

Let's do a simple substitution and resurrect Prism for Kujira.

• LP KUJI-ATOM :: $LUNA
• staked LP KUJI- ATOM :: $cLUNA
• KUJI :: $pLUNA
• ATOM :: $yLUNA

It's not an exact translation, but it fits and well, at that!

Not only does the LP KUJI-ATOM fit the Prism-model, but it also fits the KUJI/ATOM-THANG! ... 'Thang!' meaning KUJI/ATOM-ratio to EMA20 to make swap decisions.

What does this mean? We'll use the ratio to grow BOTH $KUJI AND $ATOM off EACH OTHER!

'KUJI/ATOM-ratio vs EMA20' to make swap decisions sounds complicated, but I have confidence in this approach because I've shown myself it works for ETH/BTC with continuous, slow, steady growth in both Bull and Bear markets over the past 120 days!

"But, o, el geophf! Will this approach work for KUJI-ATOM?"

Fair question.

Will it work for:

• MNTA/KUJI?
• STARS/MNTA?
• KUJI/LUNA?
• KUJI/axlUSDC?

Theoretically, the -THANG! should work for any pair, GIVEN that both tokens are viable tokens.

But I do say: "THEORETICALLY," m'kay?

And the 'THEORETICALLY' is these are altcoins, some with a LOT more variability than others. What's worrisome to me is:

• the price-drop of $ATOM may attract liquidity to it, sinking that liquidity into a tar-pit, should $ATOM not recover.
• the newness of $MNTA making it spiky.

So that's why I'm going with LP KUJI-ATOM first. It's the OG of @TeamKujira BOW, after all. Although risk is much higher because these altcoins are affected by $BTC price-swings, that may (possibly?) be advantageous, ... or disastrous.

I'll run this experiment and find out.

At any rate, PRISM LIVES! ... or my version of it, anyway, on the @TeamKujira blockchain.

We are at day 0. I'll keep you apprised daily of this approach.

Timeline:

• day 0, today: we start with a fresh wallet addy.
• days 1-20: record and report $KUJI and $ATOM prices and amounts
• day 21: first EMA20 swap and buy call.

I'll see you then.