[RFC] SAUCE/PRSM Strategic Liquidity & Treasury Partnership

Request for Comment
1

Summary

This RFC proposes a strategic liquidity and treasury partnership between SaucerSwap DAO and Prism Market DAO, a Hedera-native decentralized prediction market launching by 30 September 2026, with its token generation event (TGE) on that same day. The partnership has three pillars:

  • A DAO-owned SAUCE/PRSM V1 liquidity pool, seeded at launch with $18,000 worth of SAUCE allocated by the SaucerSwap DAO from its protocol-owned liquidity, matched by a one-time $18,000 PRSM grant contributed by Prism at no cost to SaucerSwap.

  • A reciprocal, ongoing SAUCE buyback funded by 37.5% of Prism’s 2% market resolution fee, executed on a recurring monthly cadence for the duration of the partnership, with each tranche of acquired SAUCE held in the Prism DAO treasury and locked for 12 months from acquisition on a rolling first-in-first-out basis.

  • A 3% PRSM token allocation to the SaucerSwap DAO, vesting linearly over 30 months from TGE, with each vested tranche then held in the SaucerSwap DAO treasury and locked for a further 12 months from vesting on a rolling first-in-first-out basis.

Abstract

Prism Market DAO operates a decentralized prediction market on Hedera. Its utility token, $PRSM, along with the mainnet version of their protocol launches by 30 September 2026, at which point it has no established public market. This partnership seeds a canonical SAUCE/PRISM V1 pool on the SaucerSwap protocol, and routes 37.5% of Prism’s 2% market resolution fee into SAUCE buybacks.

All fee flow stays on Prism’s side, so the SaucerSwap DAO is not intended to act as a collector of third-party protocol revenue. In return for allocating SAUCE to seed a V1 pool from its protocol-owned liquidity, the SaucerSwap DAO receives a one-time grant of $18,000 USD worth of PRSM to be used for liquidity provision and a 3% PRSM allocation.

Motivation

  • Upward pressure on SAUCE: 37.5% of Prism’s 2% market resolution fee funds ongoing, recurring SAUCE buybacks for the duration of the partnership.

  • Non-collector positioning: all fee flow stays on Prism’s side, so SaucerSwap does not receive or collect third-party protocol fees. This structure is intended to reduce the risk of SaucerSwap being characterized as a collector of third-party protocol revenue.

Specification & Rationale

1. Parties

  • Party A: SaucerSwap DAO (“SaucerSwap”), acting through its on-chain governance process.

  • Party B: Prism Market DAO (“Prism”), the first prediction market on Hedera.

2. Seed liquidity pool

  • Pool: a SAUCE/PRISM V1 pool on SaucerSwap.

  • SaucerSwap contributes: $18,000 worth of SAUCE, allocated by the SaucerSwap DAO from its protocol-owned liquidity.

  • Prism contributes: $18,000 worth of PRSM through its NFTs, which convert at TGE, as a one-time grant at no cost to SaucerSwap. Separately, Prism allocates 3% of its total token supply to the SaucerSwap DAO, vesting linearly over 30 months from TGE, with each vested tranche then subject to the 12-month rolling lock-up described in Section 4.

  • Ownership: the resulting liquidity-pool position is a DAO-owned position, managed and retained by the SaucerSwap DAO. This LP position is distinct from, and not subject to, the 12-month treasury lock-ups described in Sections 3-5 (which apply only to the buyback SAUCE and the PRSM allocation). The SaucerSwap DAO retains full discretion to manage, rebalance, or exit the LP position at any time, subject only to its own governance process.

  • Timing: seeded at launch, on or before the 30 September 2026 TGE.

Rationale: the arrangement establishes an initial, protocol-endorsed venue for PRISM while requiring only a modest reallocation of existing protocol-owned liquidity from SaucerSwap, matched by a PRSM grant, and gives the SaucerSwap DAO a retained position in the pool from day one.

3. Fee allocation and buybacks

  • Fee source: Prism charges a 2% market resolution fee on its prediction markets, with zero interface or trading fees collected. The allocations below apply to that fee.

  • SAUCE buyback: 37.5% of the 2% market resolution fee is allocated to ongoing SAUCE buybacks for the full duration of the partnership (i.e., for as long as the 2% market resolution fee is levied, with no fixed end date). Buybacks are executed on a recurring monthly cadence: the fee revenue accrued in each calendar month is used to purchase SAUCE during the following month. Each tranche of acquired SAUCE is held in the Prism DAO treasury, is not transferred to or collected by SaucerSwap, and is locked for 12 months from its acquisition date, released on a rolling first-in-first-out basis.

  • Core-team lockup: the Prism core team receives no tokens from its vesting allocation during a 3-month lockup period following TGE, so core-team selling into the SAUCE/PRISM pool is not a risk at launch.

4. PRISM token allocation

  • Allocation: 3% of the total PRSM token supply is allocated to the SaucerSwap DAO. Delivery is by way of a vesting schedule: the allocation vests linearly over 30 months from TGE.

  • Lock-up: vesting and lock-up are distinct mechanics that run consecutively for each tranche. Vesting is the schedule on which PRSM is delivered to the SaucerSwap DAO (linear over 30 months); the lock-up is the hold period applied to each tranche after it is delivered. Each vested tranche is held in the SaucerSwap DAO treasury and locked for 12 months from its vesting date, then released on a rolling first-in-first-out basis. Because vesting runs for 30 months and each tranche is locked for a further 12 months, the final tranche unlocks approximately 42 months after TGE.

Rationale: gives the SaucerSwap DAO a direct, vested stake in Prism’s success and long-term alignment.

5. Lock-up summary

The lock-ups below apply to two token holdings only: the SAUCE acquired via buyback and the 3% PRSM allocation. Each is locked on a per-tranche, rolling first-in-first-out basis: an individual tranche is held for 12 months in the relevant DAO treasury from its acquisition or vesting date before it can be moved. These lock-ups do not apply to the DAO-owned SAUCE/PRISM liquidity-pool position, which is addressed separately in Section 2.

  • SAUCE acquired via buyback: each tranche is held in the Prism DAO treasury and locked for 12 months from its acquisition date, on a rolling first-in-first-out basis.

  • The 3% PRSM allocation to SaucerSwap: vests linearly over 30 months from TGE; each vested tranche is then held in the SaucerSwap DAO treasury and locked for 12 months from its vesting date, released on a rolling first-in-first-out basis.

Benefits (Pros)

  • Upward pressure on the SAUCE price: 37.5% of Prism’s 2% market resolution fee funds ongoing SAUCE buybacks.

  • Mutual alignment in Prism’s success: the 3% PRSM allocation gives the SaucerSwap DAO a direct, vested interest in Prism’s growth at no extra cost.

Downside (Cons)

  • Liquidity Pools have inherent risk and the DAO-owned position is exposed to impermanent loss and smart contract risk.

  • Lock-up timing risk: the rolling 12-month treasury hold period means each locked tranche of the buyback SAUCE and of the PRSM allocation cannot be moved until its individual lock expires, so those specific holdings cannot be exited during their hold period if conditions deteriorate. (This lock-up does not apply to the DAO-owned LP position, which the SaucerSwap DAO can manage or exit at any time, subject to impermanent-loss and smart-contract risk noted above.)

Voting

  • Option A: Approve

  • Option B: Do not proceed

  • Option C: Abstain

2

Prediction markets just feel so Ethereum. Hedera is better than this. At its core, these types of markets are just fancy gambling. Just an opinion. i’m open to have my mind changed.

4

Hi @cryptoBismol, appreciate the feedback and the openness to a discussion.

Prediction markets are among the fastest-growing categories in crypto. Combined monthly volume across the two largest platforms reached $44.8 billion in June 2026, and institutional trading firms are now building dedicated desks to treat these markets as legitimate financial derivatives. That demand is proven and growing, yet none of it is currently being captured on Hedera. That is the gap Prism is built to fill.

The value to the network is direct. Every market traded generates on-chain transactions and settlement activity, contributing to TPS. Our liquidity provisioning and incentive programs are designed to attract and retain USDC on Hedera, contributing to TVL. And because a prediction market gives traders a specific reason to bring capital to Hedera, it functions as an on-ramp for liquidity that currently sits on other chains.

Prediction markets are also information tools at their core. The prices they generate are real-time probability estimates that has outperformed traditional forecasting methods, and Prism makes that data transparent and verifiable on-chain. It is a financial primitive with utility well beyond any single trade.

A proven, high-growth product category, built natively on Hedera and capturing demand that currently flows elsewhere, is a net positive for the entire ecosystem. Happy to answer anymore questions!