The original PRISM token fell about 91% on July 14 as the project moved to a new Ethereum contract after 2,500 phantom fee positions diverted rewards from holders.
Prism is restarting on a new Ethereum contract after an attacker spent most of July quietly diverting nearly 40% of trading fees from token holders through 2,500 unauthorized phantom positions. The original PRISM token, which the project is abandoning, fell about 91% on July 14 from roughly $1,145 to around $16, leaving it with a market capitalization of about $82,000. Prism’s fee-sharing design uses Uniswap v4 hooks to route part of pool trading fees to token holders, but the exploit took advantage of missing checks on whether fee-claiming addresses actually held PRISM. The relaunching team, described as pseudonymous holders who bought in on the open market and later took over operations, said the new contract adds a 5,000-position cap, requires every fee position to be backed by token holdings, and blocks routing to unauthorized addresses including the pool manager contract and Prism’s own contract. Spectrum, which creates index and basket tokens holding assets including Aave, Maple, Curve, Spark, Ondo and Ethena, uses Prism’s fee-earning mechanism across Ethereum and other chains, and nearby projects are taking a more cautious approach after the exploit. Investors watching the relaunch may focus on whether the new contract receives independent audit results, whether trading volume recovers, and whether fee distributions work as intended over time.