An Introduction to Protecc Labs

24 Jan 2024

At the forefront of the evolving digital world, Protecc Labs presents a comprehensive analysis of two transformative theses within the NFT ecosystem. This report explores the anticipation of a future where conventional revenue streams for NFT creators dwindle, propelling a shift towards NFT Finance (NFTFi) as a crucial support structure. It aims to unveil the intricacies of Protecc Labs and the Protectorate Protocol, offering a deep dive into the reformation of NFT royalty models, and the surging influence of NFT-Fi. The report seeks to spark conversations on controversial and long-standing problems within the NFT ecosystem and research the possible implications of these emerging paradigm shifts.

Differentiating Protecc Labs and Protectorate Protocol

Figure 1

Protecc Labs

  1. Liquidity Provision: Protecc Labs delivers algorithmic liquidity solutions tailored to the unique demands of NFT collections.

  2. OTC & Block Trading: Facilitating large, private transactions, providing a necessary service for high-volume traders and investors.

  3. Research: At its core, Protecc Labs is driven by a niche research framework, focusing on NFT trading, appraisal, and marketplace mechanics across blockchains. This niche expertise underpins our services and strategic direction.

Protecc Labs has positioned itself at the core of NFT trading across blockchains through its innovative liquidity solutions. By providing deep algorithmic liquidity, we offer a stabilizing force in the market, allowing for smoother price action and price discovery. Liquidity provision is not a one-size-fits-all solution; capitalizing on the unique opportunities that exist across NFT marketplaces and catering to the desired outcome of different NFT collections that we work with. 

The OTC & Block Trading service is a critical component for institutional and high-net-worth entities within the NFT space, offering discretion and reducing slippage for large-scale trades. This service allows for a more controlled and strategic asset reallocation, especially crucial in markets where timing, price impact, and public off-loading can significantly affect trade outcomes.

And, at the heart of Protecc Labs is a commitment to research. The research division underpins all operations, drawing on data analysis, market trends, and behavioral economics to inform its strategies. This research-driven approach allows Protecc Labs to anticipate market movements, adapt their services to the ever-evolving landscape, and provide insights contributing to the broader NFT discourse. This report is the first attempt at providing clarity on the NFT Finance ecosystem and outlining a couple of Protecc’s main theses.


Protectorate Protocol

The Protectorate Protocol, governed by $PRTC and incubated by Protecc Labs, distinguishes itself with innovative products that transform NFTs into yield-generating assets. A few of the guiding tenants that characterize Protectorate Protocol include:

Products:
  1. ETH Capsule: Set-and-forget yield aggregation for ETH depositors, initially running an automated strategy using BendDAO.

  2. NFT Capsule: Set-and-forget yield aggregation for NFT depositors, initially running an automated strategy using JPEG’d, Curve, and Convex. 

    1. These capsules are built to expand to the ever-evolving range of NFTFi and Defi-related yield-bearing strategies.

  3. Zaar: An accessible and normie-friendly NFT trading bot that operates via Telegram. (Soon to exist cross-chain, EVM first and then beyond)

  4. $PRTC Token: The centerpiece of governance and revenue sharing within the Protectorate ecosystem.

Revenue Streams

A multi-faceted approach to revenue that benefits all staked $PRTC holders.

Governance

A governance model that empowers staked $PRTC token holders with a say in the protocol’s future.

The Protectorate Protocol enhances the utility of NFTs by offering products that unlock capital efficiency and new value streams for holders. The NFT Capsule exemplifies this by aggregating NFTFi opportunities, allowing NFT holders to earn a yield on assets that would otherwise be idle. By automating the yield strategy, users of the NFT Capsule do not need to possess a sophisticated understanding of money market parameters or constantly monitor their position out of fear of being liquidated, as they would by borrowing against their assets on a typical NFT lending market.

Zaar, Protectorate’s custom-built NFT trading terminal, streamlines the user experience, making NFT trades as easy as sending a message on Telegram. With features like best-in-class account encryption and liquidity aggregation across all traditional NFT marketplaces, Zaar is uniquely positioned to lower the barrier to entry for users who may be daunted by traditional trading platforms, thus expanding the market to a broader audience while simplifying trading strategies and wallet tracking.

The governance structure facilitated by the $PRTC token is instrumental in shaping the ecosystem. As Protectorate is actively undertaking efforts to decentralize it’s governance structure, staked $PRTC holders will assume a central role in the oversight and development of the Protocol. This economic model is designed to foster long-term alignment between the Protocol and its tokenholder community.

The two businesses exist to cater to differing target markets across the NFT landscape. Protecc Labs works directly with ecosystems, funds, marketplaces, NFT collections and creators to support the financial and liquidity needs of these businesses. Meanwhile, Protectorate Protocol sits a layer above all the various projects and tooling that exists for NFTs and aims to simplify the entire process for NFT collectors, from providing simple access to yield for idle NFT inventory through the various capsule to simplifying the NFT acquisition process Zaar.