Buzz
Prism is described as the 'world's first trusted cryptocurrency portfolio platform.' Introduced for users interested in cryptocurrency and wanting to invest but unsure how to start. So, let's explore some information about this Prism platform with Mytour.
Exploring Insights into the Prism Platform
What is ShapeShift Prism?
The platform is developed and operated by ShapeShift, well-known for cryptocurrency-to-cryptocurrency trading services, similar to other exchanges like Bittrex.
With Prism, users can create 'pools' for various coins, then hedge profits to increase the value of those coins. It's akin to traditional investment, just with virtual currency. All funds are held in smart contracts using Ether as collateral.
Prism was introduced in late May 2017.
How does Prism operate?
Prism operates based on a smart contract called a 'differential contract' or CFD. This contract allows two users to 'bet' on the price of a coin in the future. Both parties must stake an amount of ETH to place the bet. This 'bet' is referred to as Prism. When Prism closes, users can withdraw the ETH amount from their respective bets.
With Prism, the betting occurs between the user and ShapeShift. When Prism opens, both parties have an equal amount of ETH. If the price rises and the CFD smart contract is closed, users receive more ETH than they staked, and ShapeShift recovers less ETH. If the price falls and the CFD closes, users receive more ETH than they staked, and ShapeShift receives more.
The prices of underlying assets are determined by an 'Oracle.' The Oracle releases Ethereum prices approximately every 30 minutes.
Another intriguing aspect of the Prism system is ShapeShift's self-protection mechanism, ensuring the safest betting experience even amidst market volatility. In theory, this means they won't incur losses.
Transaction Fees on ShapeShift Prism
One of Prism's significant limitations is its high transaction fees. ShapeShift earns revenue through these fees. The platform charges users to compensate for the capital account. The maintenance fee is 1% per month/prism. Although it may seem minimal, it equates to an APR of around 11% (not 12.6% as explained by George Reith on Medium).
Additionally, there's a 2.4% closing fee when you want to sell your Prism and cash in on the betting event. The rebalancing fee is 0.5%.
Here's the calculation method: if you create a Prism with a value of 1,000 USD, then rebalance the Prism monthly and close that Prism after 1 year, you would incur approximately a 160 USD loss on your initial investment.
An 11% APR is not insignificant. Fees at this level may drive some users towards alternative cryptocurrency betting scenarios, such as buying cryptocurrencies with a credit card and using them for betting.
How to Register for Prism
Prism is currently in the closed beta phase. The Prism betting amount is limited to 10 ETH.
You can also register a Prism account on the official website: https://prism.exchange/login.
Regular invitations are sent to registered users. However, there's no guarantee that upon registration, you will receive an invitation until the final version.
Despite the high fees, ShapeShift Prism, as a novel service, uniquely facilitates investors to easily delve into cryptocurrencies without needing to acquire their own assets. The platform ensures the safety of your cryptocurrencies throughout your investment period.
Although Prism operates on the Ethereum network, users can purchase cryptocurrencies outside the Ethereum blockchain. For instance, both Bitcoin and Litecoin are available through ShapeShift Prism.
To explore additional information about the Prism platform, you can refer to various online sources. Currently, Prism is in the closed beta phase, with betting amounts limited to 10 ETH. If the closed beta phase proves successful, Prism will continue its development in the coming months.
