🌎Introduction to Protectorate Protocol
Visual Overview of Protectorate Protocol
Protectorate aims to be the definitive liquidity layer for NFTs. At its core, it offers:
ETH Capsule, a yield aggregation & liquidity routing platform in the form of the that aims to deliver the highest yield possible by safely deploying assets deposited into a variety of strategies across partner NFTfi protocols.
Zaar, an entirely new trading experience for NFTs.
As the protocol develops, Protectorate's primary goal is to become the de-facto liquidity layer for NFTs.
Core Products
This section provides an overview of the initial and future iterations of Protectorate Protocol, along with brief explanations:
ETH Capsule
Deposit ETH into the Capsule, and the protocol will route ETH to several strategies, optimizing for the safest yet most profitable yield sources. The initial iteration of the ETH Capsule will utilize BendDAO. ETH will be deposited into the Lending Pool, and the yield will be distributed as shown in the flowchart below. Earned yield is harvested and compounded into the strategy.
Additional strategies are being finalized and will be incorporated in the near future.
ETH Capsule Flow
NFT Capsule
The NFT Capsule allows users to deposit their NFTs from supported collections and earn real yield (ETH), in an actively-managed strategy.
The NFT Capsule will create an even more attractive NFT collection experience. Not only are JPEG’s no longer illiquid, but you can now earn yield on your otherwise idle holdings using the NFT Capsule.
Using deposited NFTs from supported collections, the protocol will primarily borrow pETH from JPEG’d, at a safe LTV, which is then used to run a strategy on Curve & Convex Finance → auto-compounding yield by default, which then streams WETH rewards to depositors.
Risks and Considerations
When you first deposit an NFT into the NFT Capsule, some slippage is incurred. Keep this cost in mind when calculating potential yields, and only deposit your NFTs with the intention of keeping the NFT in the capsule for an extended period of time to earn back this initial fee.
If the position is underwater when you would like to withdraw (this will be the case when you first deposit), you will need to ensure that you have sufficient pETH (the JPEG’d synthetic ETH asset) balance to repay the amount owed before you are able to withdraw your NFT.
Positions will be regularly monitored against any liquidation risk, and your NFT will be withdrawn for you (to your wallet) if your position approaches within a reasonable margin of liquidation. However, if we have to withdraw your NFT, you will receive your NFT back, you will forfeit all yield as a liquidation protection fee.
All profits are withdrawn in the form of CRV LP Tokens in the form of ETH/pETH.
While we assist in preventing liquidations as much as possible, Protectorate Protocol is not liable for any lost NFTs due to any liquidations that occur.
Supported Collections at Launch (all collections accepted on JPEG’d as collateral) 🖼
NFT Capsule Mechanics
Zaar
Zaar is purpose-built to flip NFT trading on its head, as a first-in-class product designed to bridge NFT traders of every caliber under one unified platform. Zaar has initially launched with Telegram functionality, with the goal to expand to Discord and its own dedicated web interface, rapidly.
Zaar Flow
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