Mind Your Ps and Ys

Q173. Make your case for the relative value of pLUNA or yLUNA! Define the key inputs to the relative valuation for each; various methods of valuation (discounted flows, comparables, growth-based models) will be accepted as long as you make a reasonable case for them and support them with evidence.. Over a time period of your choosing, how has pLUNA or yLUNA’s price changed as these key inputs have changed?

Introduction

The Prism Protocol is a new project within Terra ecosystem that allows assets to be refracted into their principle and performance components to facilitate greater composability and liquidity for users.

The platform is based on asset splitting, allowing the user to also take on leveraged exposure to the underlying asset via pLuna or to performance via yLuna.

Initially the pLuna and yLuna will be perpetual, meaning that they run indefinitely and to return your initial LUNA you will have to match the pLuna and yLuna equally and deposit it back into the smart contract.

In this article, we will try to calculate the price of both assets and compare some other metrics.

Methodology

To be able to get the yLUNA and pLUNA prices, I have taken into account the transactions (buys and sells) between the tokens and UST due to the pairs have been enabled since around a week ago. Then, I have computed as well the number of buys for each token, as well as the number of buyers. Finally, I have analyzed the correlation between both prices.

Results

As a results, it can be seen how the number of buys have been increased constantly since the launch of the pairs. However, the number of buyers seems to be stopped its growth in the alst days. as well, the numbers seems to be higher for pLUNA rather than yLUNA.

Finally, taking into account the prices, we can see similar trends the price of pLUNA oscillated between 19.45 and 20.75, while yLUNA between 77.5 and 87.2. The last chart shows the strong positive correlation between both pairs.

Conclusion

In this chart we have analyzed the new yLUNA and pLUNA tokens provided by Prism Protocol. The metrics analyzed have been the buys, buyers and prices of tokens as well as the correlation between them taking into account the swaps between yLUNA and pLUNA against UST.