Pylon <> PRISM Partnership Announcement

Yield Token Redirection

Pylon Protocol is built on the core mechanism of yield redirection. While Pylon has been redirecting Anchor’s TerraUSD (UST) yield thus far, we are excited to expand on our offering by partnering with PRISM to redirect LUNA staking rewards.

PRISM will be the first Pylon Gateway project to adopt yield redirection of LUNA staking rewards, and forthcoming Pylon Gateway launches will also enable LUNA yield redirection at the projects’ discretion.

Users will be able to split their LUNA into pLUNA and yLUNA and then deposit their yLUNA tokens in Pylon Gateway which will power a principal-protected value transfer of LUNA yield for PRISM tokens. This powers enhanced capital efficiency as users are able to keep and use their pLUNA tokens in any number of ways, including lending and trading, as well as providing liquidity in the pLUNA-PRISM pool. Long-term LUNA holders will now be able to earn tokens in new protocols on Pylon without having to sell a single LUNA.

As PRISM refracts more yield bearing assets (e.g., yETH, ySOL, yDOT and yATOM), Pylon could expand beyond LUNA to allow partners to accept those assets as alternative forms of deposit. For example aUST, which could be split into paUST and yaUST, will allow users to deposit yaUST into Pylon while keeping their paUST tokens to use as collateral or to purchase other tokens.

Pylon Scout

Inspired by Mango Markets’s token launch and MISO’s batch auction format, Pylon is collaborating with PRISM to experiment with a third IDO model that we’re calling Pylon Scout. This is a new process with the following goals:

• Completely eliminate bot activity
• Ensure that everyone gets the same market price
• Make IDOs time zone agnostic
• Ease overall network congestion

So how does it work? Pylon Scout will have two phases, a contribution phase and a withdrawal phase. During the contribution phase, participants will be able to deposit UST into a vault. As the amount of UST increases, so will the sale price of the token. The more UST in the vault, the higher the final purchase price of the token. Price will be determined by the following formula:

Price = Total UST in vault / Tokens to be distributed

After some predetermined amount of time, the vault will transition into the withdrawal phase whereby users can choose to withdraw their deposited UST if the price of the token is higher than they would like to pay. As users withdraw UST, the price of the token will decrease. At the end of the second period, the tokens will be divided up amongst all the contributors according to their remaining share of UST in the vault.

If the Pylon Scout experiment is successful, future projects launching on Pylon will be able to choose from three different launch models: Pylon Pools, Pylon Swap, and now Pylon Scout. We believe in choice and will let all project teams and their communities decide what makes the most sense for their token launches.

How does this benefit MINE stakers?

The fees that are generated from Pylon IDOs directly benefit MINE stakers. Profits are used to buy back and redistribute MINE tokens to governance stakers, and this process increases buy pressure which ultimately increases the price of MINE. One of the benefits of launching tokens with prices that reflect actual market demand is that Pylon will generate significantly more fees, which will result in larger MINE buybacks and higher prices. This is both beneficial for long-term MINE believers and for our protocol partners.

Using the launches on Solana as an example, there have been three so far using the Mango Markets method; Mango Markets ($70m), Parrot ($85m), Aurory ($109m). At the current rate of 10% commission on Pylon Scout which goes back entirely to MINE governance stakers, this would have generated $26.5m in buybacks for MINE stakers. There is currently ~$35m worth of MINE staked, which would yield a return of 76% after just 3 launches. Factoring in the addition of yLUNA pools, the value accrual for MINE stakers from these two new launch methods could be substantial.

We are also delighted to announce that MINE governance stakers will also be eligible to participate in the PRISM airdrop.

Summary

Pylon and PRISM aim to be at the forefront of innovations on Terra and with the Cambrian explosion of projects about to launch, we believe these two new innovations will allow protocols and users greater flexibility. Offering these alternatives will mean a larger share of launches are performed using Pylon which maximises the value accrual of MINE stakers. We believe these new launch methods will be beneficial for UST demand, LUNA holders, new protocols and most importantly users of Pylon and MINE stakers.