Token Model
PRISM tokenizes risk exposure, not individual loans, and does not introduce a protocol or governance token. The only tokens the protocol issues are tranche tokens and AMM liquidity-provider tokens.
What PRISM Tokenizes (And What It Doesn't)
A credit protocol can tokenize at three different layers. PRISM intentionally chooses one and rejects the other two.
| Token category | What it represents | PRISM uses it? |
|---|---|---|
| Per-loan token | One token per individual loan, often as an NFT | ❌ No |
| Tranche token | Fungible claim on a risk class within a credit pool | ✅ Yes — pPRIME, pCORE, pALPHA |
| Protocol / governance token | Separate token for governance, incentives, or fee capture | ❌ No |
Why Tranche Tokens, Not Per-Loan Tokens
A per-loan token model creates one fragmented market per loan. Each token has a separate buyer, separate due-diligence requirement, and thin standalone liquidity.
A tranche token model creates three deep markets per vault, each representing a slice of risk across whatever loans the vault holds. Risk is diversified at the pool level. Liquidity is concentrated at the tranche level.
Tranche tokenization is the same pattern that traditional structured credit (CDOs, CLOs) uses to make pooled credit exposure tradable.
Why No Protocol Token
PRISM's purpose is to make credit risk programmable, transparent, and tradable. Introducing a separate governance or fee-capture token early would distract from that core thesis and add regulatory ambiguity without functional benefit. The protocol remains tokenless until a clear utility — most likely an insurance backstop tranche — emerges in a later phase.
Tranche Tokens
| Token | Tranche | Meaning |
|---|---|---|
pPRIME | Prime | Claim on Prime tranche NAV |
pCORE | Core | Claim on Core tranche NAV |
pALPHA | Alpha | Claim on Alpha tranche NAV |
Lifecycle
Tranche tokens are:
- Minted on deposit.
- Held in user token accounts.
- Traded on AMMs.
- Burned on withdrawal.
They are not receipt NFTs. They are fungible claims on a tranche's current accounting value.
Transferability
Because tranche positions are tokenized, users can move exposure without closing the vault position directly.
Transferability enables:
- Secondary market liquidity.
- Portfolio construction.
- Strategy vaults.
- Integrations with external analytics and risk interfaces.
Redemption
Redemption value is based on current NAV, not original deposit amount.
redemption_value = token_amount * tranche_NAV
If a user buys pCORE on the AMM at a discount to NAV, the vault still uses NAV for withdrawal. If a user buys above NAV, the vault still uses NAV. The protocol does not remember trade price.