Glossary
AMM
An Automated Market Maker that allows for permissionless trading without the use of order-matching or specified counter-parties. AMMs use liquidity pools which allow users to swap assets that are priced by an algorithm. To learn about Pryzm's YAMM, visit the markets page. To learn how to use Pryzm's trading market, visit the swap guide.
cToken
On Pryzm, yield-bearing assets like LSTs are called Collateral Tokens, or cTokens. Users can bond assets in Pryzm to turn them into cTokens. These cTokens represent any yield-bearing token, such as LP tokens, LSTs, or Real World Assets (RWAs). cTokens can be split into Principal Tokens and Yield Tokens through a process called Refraction.
Visit the cTokens page to learn more. To learn how to create cTokens, visit the liquid staking guide.
LP token
An LP token represents a share of an AMM liquidity pool. When users provide assets to a liquidity pool, they receive LP tokens in return, proportional to the amount they deposited into the pool. To redeem their assets, users can exchange the LP tokens for their share of the pool. Because pool amounts rebalance based on trading, the makeup of the assets you deposited may be a different amount than you receive, but the total value will be representationally equivalent to your original LP position. Users pay fees on swaps, which get added to the pool, increasing the value of an LP as swap volume increases.
To learn how to provide liquidity and receive LP tokens, visit the liquidity guide.
LST
A Liquid Staking Token (LST) is a special type of token you receive when you stake your cryptocurrency on a Proof-of-Stake (PoS) blockchain. For example, if you stake ETH, you receive an LST that represents your staked ETH. While your original ETH is staked and earning rewards, the LST can be traded, sold, or used in other DeFi applications. This provides flexibility and liquidity, allowing you to access the value of your staked assets without having to unstake them. The rewards earned from staking your ETH are automatically collected and compounded, increasing the value of your LST compared to the underlying staked ETH over time.. Visit the liquid staking guide to learn how to liquid-stake your assets.
Maturity
This is the date when each Principal Token (PT) can be exchanged for the original asset. Yield Tokens (YT) earn yield until this date but are worthless afterward. Before maturity, you can combine one YT and one PT to get the value of the asset that earns yield. Learn more about maturity.
pToken
A Principal Token (PT) lets you redeem the value of a staked asset after a certain period. For example, if you have 1 pETH with a 1-year maturity, you can exchange it for 1 ETH worth of liquid staked ETH after 1 year. You can trade PTs anytime before they mature, giving you flexibility to adjust your investments. PTs don’t earn interest while you hold them. Instead, you buy them for less than their full value, and as they get closer to the maturity date, their price goes up. This way, when the PT matures, you get the full value you were promised. Visit the pToken page to learn more.
Refraction
Pryzm Zone allows you to convert yield-bearing or liquid staked tokens into two parts: principal (pTokens) and yield (yTokens), each with a fixed maturity date. This process, known as refraction, separates the original investment from the generated yield, enabling more flexible and strategic financial management. For more details, visit the Refraction page or check out the Refraction guide to learn how to refract your tokens.
Staking
The act of locking up a coin with a validator in exchange for rewards. Staking is used to secure Proof of Stake blockchains. Visit the Staking 101 page to learn all about staking. To stake assets on Pryzm, visit the staking guide.
Validator
The miners of a Proof of Stake blockchain. Validators run nodes that participate in consensus and decide which transactions are valid. Visit the Staking 101 page to learn more about staking and validators. To stake assets on Pryzm, visit the staking guide.
Yield
The earnings generated from a principal asset. In the case of LSTs, the yield is generated from staking. Visit the cToken page to learn more about yield. To learn about different yield strategies, visit the strategies page.
yToken
A yToken gives you all the profits from the underlying yield-bearing token until its maturity date. After maturity, the yToken has no value because it has already paid out all the yield. yTokens can be traded at any time, even before maturity. Since yTokens can be bought for a fraction of the underlying asset’s cost but provide the full yield of the underlying asset until maturity, they offer a leveraged way to gain exposure to the asset’s yield. Visit the yToken page to learn more.