Prisma Finance, an emerging decentralized lending protocol, made headlines when its total value (TVL) rose to $320 million, a staggering increase of $240 million in one day. The increase coincided with the launch of the governance token PRISMA, marking a major development for the platform.
Prisma Finance TVL chart (Source: DeFiLlama)
Justin Sun’s alleged role in golf
XArkham monitoring data showed a massive $110 million wstETH deposit on November 2 via an address linked to Justin Sun.
In the past hour, a large address linked to Justin Sun has deposited $110 million of wstETH into the @PrismaFi pools and minted more than $60 million of the stablecoin mkUSD.
This address 0x9FC currently owns >60% of the wstETH deposited in Prisma. pic.twitter.com/3Xl1QRMICH
— Arkham (@ArkhamIntel) November 2, 2023
The deposited wstETH was used to mint over $60 million worth of mkUSD stablecoins. Currently, the address (0x9FC) has a dominant share of over 60% of the wstETH in the Prisma Finance pool, indicating significant involvement.
PRISMA Token’s rollercoaster ride
Despite the unprecedented rise in TVL value, PRISMA, the platform’s native token, has witnessed a drastic drop of over 78% in the last 24 hours. The sharp decline in PRISMA’s value raises questions about the sustainability of the increase and the possible implications of Sun’s involvement in the platform’s dynamics.
PRISMA 24-hour price chart (Source: CoinMarketCap)
Prisma Finance works as a decentralized lending protocol that allows users to generate a stablecoin, mkUSD, backed by liquid staking tokens. Additionally, the protocol reportedly offers multiple layers of security, including a stability pool composed of mkUSD and a network of borrowers acting as collective guarantors, strengthening the stability of the platform.