Getting this question a lot, so trying my hand at a guide... here goes nothing... please feel free to comment with changes and such if you notice anything wrong :)
There is a letter limit to how long your prefix can be. The color code and other alterations count in the length. 14 letters appears to be the limit. Please take this into consideration when deciding what prefix you want to go with.
General rules apply to your prefix, no bad words, no bad implications.
To set a prefix the command is: /setprefix
The example I typically use is as follows: /setprefix yadayada
If you want colors you would have to include a color code. The color codes are specific to minecraft and look like this: &a or &1 (NOTE: This means the html color codes will not work, such as FFFFFF)
The example would change to this: /setprefix &ayada&1yada (NOTE: I have two color codes in here, that would make each yada a different color.)
If you want caps in there you can write them in. /setprefix &aYADA&1yada (NOTE: it will show up with the first yada in caps, and second not.)
Some color codes are not allowed, due to them being staff colors. Available/Unavailable codes found here: https://pixelmoncraft.com/forum/topic/6303
Example: /setprefix &1&lyada&ayada (this makes it both bold and dual colored :) ) (NOTE: tested this, the color code has to be in front of the specialized font code)
To get back to the original donator prefix simply type: /resetprefix