#yLUNA will fail without a strong case for #pLUNA.
A 🧵 on the symbiotic relationship between these tokens.
A 🧵 on the symbiotic relationship between these tokens.
1/ While as #pLUNADAO we are focusing on creating value and use cases for #pLUNA, we believe these tokens to have a "symbiotic" relationship. Neither can thrive, without the other succeeding as well.
2/ Why do we believe this to be case?
#yLUNA and #pLUNA are synthetic components of #LUNA. By splitting ("refracting") LUNA on @prism_protocol a plethora of potential use cases open up for #LUNA and all of its #ecosystem. This is the inherent magic of the @prism_protocol.
#yLUNA and #pLUNA are synthetic components of #LUNA. By splitting ("refracting") LUNA on @prism_protocol a plethora of potential use cases open up for #LUNA and all of its #ecosystem. This is the inherent magic of the @prism_protocol.
3/ The #yLUNA token derives its value from representing ownership of all #LUNA #staking rewards as well as #airdrops.
#pLUNA on the other hand, represents the "principal" of the #LUNA token. #LUNA's value insofar as it is NOT derived from #staking or #airdrops.
#pLUNA on the other hand, represents the "principal" of the #LUNA token. #LUNA's value insofar as it is NOT derived from #staking or #airdrops.
4/ Lately, we have seen a surge of demand for #yLUNA compared to its #pLUNA counterpart (currently around $14 for #pLUNA vs. $65 for #yLUNA).
Market participants are attributing a significantly higher value portion to #yLUNA. #pLUNA's inherent value proposition is doubted.
Market participants are attributing a significantly higher value portion to #yLUNA. #pLUNA's inherent value proposition is doubted.
5/ If this trend were to keep up, #pLUNA is at risk of asymptotically moving towards a valuation of $0. Contrary to popular belief, this would have devastating effects on #pLUNA AND on #yLUNA's inherent value proposition.
Without #pLUNA, #yLUNA will die. Here's why:
Without #pLUNA, #yLUNA will die. Here's why:
6/ The core of @prism_protocol's refraction mechanism lies in the separation of the principal investment (#pLUNA) from the derivable income (#yLUNA).
If one of these synthetic assets captures ALL value of the underlying #LUNA, then the refraction loses its purpose.
If one of these synthetic assets captures ALL value of the underlying #LUNA, then the refraction loses its purpose.
7/ As such the continous success of #yLUNA is also dependent on the survival of #pLUNA.
This is why the #pLUNADAO's core purpose is securing the utility of the #pLUNA token and thus fostering not only #pLUNA's success, but making sure #yLUNA is here to stay as well.
This is why the #pLUNADAO's core purpose is securing the utility of the #pLUNA token and thus fostering not only #pLUNA's success, but making sure #yLUNA is here to stay as well.
8/ To achieve this, we are actively researching and collaborating on #pLUNA use cases. We are happy to share more exciting news in the coming weeks, so definitely stay tuned!
Until then, happy #refracting on @prism_protocol ;)
#terraluna #luna #UST #pLUNAarmy #pLUNAstrong
Until then, happy #refracting on @prism_protocol ;)
#terraluna #luna #UST #pLUNAarmy #pLUNAstrong
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