LENDING

LENDING

In typical lending systems the lending amount exceeds the in-flow revenue of services at some point in time leading to a crash of the system due to illiquidity. For the dynamic lending model a sophisticated feedback loop is employed which adjusts the lending reward and the acceptable total lending amount dynamically by taking into account the price and volume history of PRIS (short- and long-term price chart patterns, i.e. technical analysis), the lending amount and service fee history, as well as sentiment analysis of the cryptocurrency market and the PRISMA platform in particular. Together with some additions like the resonator and the temporary lending cap this leads to a sustainable lending model.

If the revenue ratio and thus the average daily interest rate drops to a minimum, a gradual lending amount cap is executed so that the system can recover. As long as the cap is activated no new Prismacoin can be invested into the lending program, while nothing changes for the already invested Prismacoin.

Temporary lending cap: When the average daily interest rate drops to a minimum due to a very high lending volume in comparison to the service revenue, a temporary lending cap is activated to let the system recover. When the service revenue catches up, the cap is lifted.

To be resilient against massive incoming revenue drops due to lost trust or declining user numbers in the crypto space (e.g. as a result of negative political and/or economical news) the resonator is installed to keep the lending platform running at minimal daily interest rates. In times of abundant adoption and value growth the resonator is constantly filled by service fees (and optional by donations). In prolonged times of low service fee revenue the lenders will be paid from the accumulated tokens in the resonator.

If the revenue stays low in comparison with the capped lending amount for a prolonged time, the resonator kicks in to continue to pay dividends to the lenders. In this time the focus of the PRISMA team will be to promote the platform services heavily to increase the revenue again.

In the worst case the service revenue stays low for a prolonged period of time. In this case the resonator kicks in to ensure that dividends are still paid to the lenders. While the resonator is being used to pay dividends all the focus of the PRISMA team will lie on the build-up of a concentrated marketing campaign to increase the service revenue by promoting the platform intensively.

The total lending amount can also drop, e.g. when investors decide to reinvest their initial investment and profit in other assets seeking higher returns of investment or realize profits by converting to other cryptocurrencies or even fiat money. In the case of growing service revenue income in comparison to the total lending amount the daily interest will be maximized. The resonator will be quickly filled with fees in these times, preparing for periods with low income ratios .

For very high service adoption and subsequent revenue the daily interest is maximized while the resonator filling rate is also at maximum to prepare for periods with lower service revenue income in comparison with the total lending amount.

The dynamic lending interests are shown in the image below. Depending on the lending amount the upper interest rate limit differs, while the lower interest rate limit stays always at 0.15% daily. The higher the investment the bigger the lending interest and the shorter the lending periods will be. The maximum possible monthly interest can go up to 27 % on your initial investment. Lending periods also differ and are dynamically calculated, but are never longer than stated here.

Despite the ICO buy cap of 3 ETH per user, after accumulation of more PRIS on the internal or an external exchange, a higher amount can be lend in the program. For details on the lending system and PRISMA in general, please refer to the PRISMA whitepaper.