What you should know
Prism is built to keep your deposit yours, but no design removes every risk. These are the ones that stay. Read them before you deposit.
- 01
Stablecoin risk
USDC, PYUSD and NOTE are worth a dollar only while their issuers hold their reserves and keep redemptions open. A depeg of USDC or PYUSD would change what deposits and credits are worth.
- 02
A loan on your stock
A stock vault borrows PYUSD worth 30% of the stock’s value. If the stock falls far enough, the loan is repaid early from the vault, and in an extreme fall Kamino can liquidate part of the collateral.
- 03
Your stock price still moves
Depositing does not hedge anything. The value of your shares goes up and down with the market, exactly as if they sat in your wallet.
- 04
Rates depend on demand
Interest comes from borrowers on Kamino. When demand falls, rates fall, and a stock’s spread can turn negative; then it earns nothing until it turns back.
- 05
Withdrawals can wait
If most of a Kamino reserve is lent out at once, withdrawals can wait until borrowers repay or new deposits arrive. Kamino’s rates rise sharply in that state to bring liquidity back.
- 06
The stock token issuer
xStocks are issued by Backed. The issuer can freeze or pause its tokens, and redeeming them for the underlying shares follows its terms. No vault can remove those controls.
- 07
Weekend and overnight price gaps
Stock markets close; tokens trade on. Prices can jump when markets reopen, and oracles follow the market, which can move a loan toward its limit at once.
- 08
Prism runs the keeper
A keeper run by Prism collects interest and mints NOTE. If it stops, interest keeps accruing in the vault but is turned into credits late.
- 09
Smart contract risk
The vault program, Kamino and the token programs are code. Bugs can lose funds even after reviews and tests.
- 10
Where you live
Tokenized stocks are not available in every country, and the rules that apply to you depend on where you are.
Not investment advice. Nothing on this site is a promise of return.