$sPRIME is the main currency within the DeltaPrime ecosystem. It is primarily used in three ways:

  • Pay for Prime Features

  • Claim 33% of protocol revenue

  • Mint Governance Power

In traditional tokenomic models, sTOKEN is the staked version of the native token. The goal is to take the token out of circulation to artificially increase perceived value. In return for staking the token, the person who stakes gets rewarded through token emissions. Variations on this model experiment with the lockup time, withdrawal penalties, and additional lockup benefits after certain lockup milestones have been reached. Many of these models temporarily succeed in creating price-growth. That is, until the token crashes, the market crashes, or another event occurs which makes people lose trust in the future value of the token. When that inevitably happens, stakers are presented with a choice: 1) keep their stake, accumulating yield that, together with their principal, rapidly loses value or 2) sell their stake, potentially buying the asset back at a lower price. Whenever the perceived value of staking drops below the perceived loss of unstaking, holders will sell their token, further crashing the price. While lockup periods do decrease the intensity of the token crash, they also tend to extend the crash as people who have made up their minds about exiting, simply wait out their lockup to eventually sell. It mitigates negative effects, but does not solve them.

(3,3) becomes (0,3) becomes (0,0) becomes (-3,-3).

The $PRIME assets should support the ecosystem. Having sustainable price growth is a means to that end, it is not an end goal in and of itself. While locking $PRIME would temporarily help stabilize price growth, it would simultaneously result in trapped liquidity within the DeltaPrime platform. Liquidity that would do nothing, but exist in a vault. The very thing that crushes capital efficiency across chains, and the very thing that DeltaPrime is fighting to solve.

Efficient staking

Since locking $PRIME would lead to less capital efficiency than locking an LP token, $sPRIME cannot be created by just staking $PRIME. Instead, it is a receipt token that represents a $PRIME LP position in either Trader Joe (AVAX-PRIME on Avalanche) or Uniswap (ETH-PRIME on Arbitrum). From a user-perspective, the process of creating $sPRIME is very straightforward. To create Avalanche’s $sPRIME for example, you bring either $AVAX, $PRIME or TJ AVAX-PRIME to the DeltaPrime app. Here you click on “mint $sPRIME”, and select the asset and the quantity you wish to convert into $sPRIME. The range is automatically set to be equal for all DeltaPrime participants.

As long as the current price is within the price range of your $sPRIME, your $sPRIME is considered “active”. Your liquidity actively deepens the pool, supporting DeltaPrime’s growth. Active $sPRIME is eligible for 33% of all of the protocol’s revenue.

The benefits of $sPRIME

In holding active $sPRIME, users are actively contributing to the DeltaPrime ecosystem in three major ways:

Efficient swaps

In order to mint and hold $sPRIME, one has to provide an LP token. It is this liquidity that allows other users to swap $PRIME for other assets with minimal slippage. As regular $PRIME trading is necessary to use any of the Prime features, low slippage benefits everyone within the DeltaPrime ecosystem.

Increased stability

The volatile nature of crypto assets is a major deterrence for many potential crypto-users. Through enforcing deep pool liquidity, high volume trades can be absorbed by the liquidity without affecting the price too much. This stability empowers users with the ability to predict what $PRIME will do in the future, allowing them to adjust their buying behavior without having to take into account the effects of smaller whales entering or exiting the ecosystem.

Buffer for unlocks

Like the vast majority of projects, DeltaPrime has raised funds for development. While short cliff- and vesting periods have been the bane of many projects, so too has been shallow pool liquidity. The expectation of the price crashing, due to shallow pools and large unlocks, has had many self-fulfilled prophecies as a result. The way to prevent this is not by preventing users from selling their tokens, but instead, by creating a liquidity buffer large enough that any selling pressure can seamlessly be absorbed without significantly affecting the price.

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