Prism – World’s first platform for portfolios of assets.

Prism is built by (ShapeShift is famous platform for crypto asset conversion and exchange). Currently Prism is under private beta and users can join their waitlist. Prism is a first of a kind platform for creating portfolios of assets. Prism, is an Ethereum based decentralized application. It does not have its own token.

Prism helps you create portfolio of group of crypto-currencies called Prism. You bet an Ethereum collateral against each Prism. While using Prism, you do not actually own the crypto-currency. Its creates a smart-contract which establishes trust that you indirectly hold a set of crypto-currencies with the collateral of ethereum, Prism currently will match that collateral amount on its side. So, if you gain, you will get your collateral + the gain amount from Prism collateral in form of Ether (maximum 100% of the gain , which is Shapeshift’s collateral matching bet) . Post beta, Prism will allow any third party to put the collateral match, which can be higher than the collateral posted by the user, that would make it possible to yield more than 100% gains. Designed and built by ShapeShift, Prism uses smart contracts deployed on the Ethereum network to bring custom portfolio management to everyone. You can create and rebalance your own portfolio, as well as browse the public portfolios of others and follow them.

Here’s a quick overview of how it works:

  • User visits the Prism website and creates an account
  • User enters the size of their desired investment in ETH
  • User configures a cryptocurrency distribution of their choice (see below)
  • User deposits the ETH amount to a smart contract Ethereum address designed by ShapeShift
  • ShapeShift deposits an equal ETH amount to the same smart contract
  • The deposited ETH remains within that smart contract until a point in time when the user decides to liquidate the investment
  • When the user liquidates their Prism, they receive the current value of their investment in ETH back to their own address

The business model is based on the monthly account management fees and other means. During the private beta phase, there will not be a monthly fee for maintaining portfolios.

Prism is not for day trading, since the cost of setting up vs profitability will be high. And because of oracle’s are not frequently updating the latest prices due to cost of maintenance of oracle.  Prism plans to target users who would like to keep their portfolios for at-least 1 week.

The good:

  • Keeping your funds in exchanges can be risky, considering the number of hacks that happened to exchanges. Prism solves this problem by users not actually buying the assets but trading through smart contracts.
  • Keeping multiple wallets locally to maintain different crypto currencies is another management hassle. Prism solves this problem by users not actually buying the assets but trading through smart contracts.
  • The first company to bring this smart contract and collateral based solution for managing portfolio of digital assets.
  • Great place to get returns without actually buying the crypto-currency.
  • Shapeshift has a open sourced git repository here.

The bad:

  • Currently the maximum you can make is 100% , because Prism puts the collateral on the other side.
  • What happens to the funds that are locked up in the contract between you and ShapeShift is decided by the oracle (which, coincidentally, is also developed by ShapeShift).
  • Once the private beta period is over, there would be a monthly fee for maintaining your portfolio’s (prisms), not clear how much will this end up.
  • There is a risk , with this approach that Prism can loose money as well. Because in private beta , Prism plans to put the collateral as well. Not sure, how they would mitigate this risk.
  • There is no transparency in terms of how or what Prism does to reduce its risk.
  • No clear idea in the scenario when some crypto-currencies get delisted suddenly.
  • Since assets are not directly under your name, you might loose the skin in the game.

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