What is PrismaLRT?

PrismaLRT is a new borrowing protocol developed by Prisma that focuses on unlocking liquidity for Liquid Restaking Tokens (LRTs). LRTs are a recent asset class empowered by EigenLayer, allowing users to access additional yields from restaking. However, LRTs face the challenge of utility, similar to what Liquid Staking Tokens (LSTs) encountered during the development of Prisma.

In response, Prisma introduces $ULTRA, a stablecoin backed by LRTs native to Prisma. $ULTRA allows depositors to retain the rewards and upside of owning LRTs while unlocking their capital in the form of a stablecoin. This stablecoin enables users to capture additional opportunities and yields in Prisma or DeFi.

PrismaLRT operates within the same decentralized application (dApp) as Prisma, allowing users to choose which collateral they want to access. Borrowers can mint $ULTRA by supplying collateral at a specific ratio. When a debt position is repaid or liquidated, the protocol burns the corresponding $ULTRA tokens.

Fees and interest accrued by minters of $ULTRA are transferred directly to the Prisma FeeReceiver. Additionally, PrismaLRT uses RedStone Oracles to provide price feeds for collateral assets, starting with weETH. Collaboration with RedStone is planned for future collateral integrations as well.

For more information on the RedStone Classic model utilized by PrismaLRT, documentation is available at the provided link: https://docs.redstone.finance/docs/smart-contract-devs/get-started/redstone-classic