Risk & Market Layer
The Risk & Market Layer provides liquidity and price discovery for PRISM credit positions.
PRISM separates accounting value from market value. Tranche NAV is determined by vault state. Market price is determined by traders.
Secondary Markets
Each tranche token can be paired with USDC in a constant-product AMM pool.
Supported markets:
| Market | Purpose |
|---|---|
pPRIME / USDC | Low-risk tranche liquidity |
pCORE / USDC | Intermediate-risk tranche liquidity |
pALPHA / USDC | Residual-risk tranche liquidity |
These markets allow users to exit or reposition without waiting for vault withdrawal flows.
Pricing Mechanism
Market prices are determined by:
- Supply and demand.
- Risk perception.
- Expected future cash flows.
- Realized defaults.
- Liquidity depth.
PRISM does not force AMM price to equal NAV. The difference between those two values is useful information.
NAV vs Market Price
The protocol separates:
- Intrinsic value: NAV, based on tranche assets and token supply.
- Market price: AMM price, based on pool reserves and trading activity.
This enables real-time risk interpretation.
For example, if pALPHA still has positive NAV but trades at a heavy discount, the market is expressing concern about future losses or insufficient yield.
Why This Matters
Traditional credit marks can lag reality. PRISM makes pricing dynamic. When a default event occurs, vault NAV changes deterministically, and AMM prices can react immediately as traders reassess each tranche.
That creates a visible feedback loop:
- Credit event occurs.
- Loss cascade updates NAV.
- Traders react.
- Market price moves.
- Dashboard shows both accounting value and market sentiment.