ProtoFi Protocol Brings Financial NFTs to Fantom Blockchain

By Edward Moon | Analysis From Moon | 19 Jan 2022

By the tail end of 2021, there were more organic searches for NFTs than crypto for the first time in history. 

Preceding this flip was an unprecedented exponential growth of NFTs. The scramble for digital assets could be traced to early 2020 when Beeple sold his collection for $69 million. 

However, the real disruption with NFTs is its flexibility. Like composable smart contracts, the sub-sector allows the building of exciting Legos, bringing together different industries. 

Of interest is the merger of NFTs and DeFi--an equally disruptive industry currently managing over $240 billion in Total Value Locked (TVL) across different chains.

ProtoFi Deploys on Fantom

Among the most active platforms hosting an array of DeFi dApps is Fantom. The DAG-powered, highly scalable smart contracting blockchain plays host to ProtoFi. The platform creators are building what they describe as the first user-owned decentralized bank boasting one of the most advanced yield farming protocols on the Fantom ecosystem. 

Currently, ProtoFi exists as an Automated Market Marker (AMM) protocol allowing investors to be owners and receive a share of the platform's fees generated enabled by a dual-token system comprising support of Electron (ELCT) and PROTO coins. 

PROTO holders can move, hold, or lock them in a liquidity pool to earn ELCT. The ELCT represents the share of the staker's size in the pool. Through the ELCT token, an investor can receive an infinite fees distribution flow from the pool as long as it is held. Typical of an AMM-dependent protocol, dApp’s fees earned are generated in-house from swapping and deposit fees and other revenue-generating activities set for incorporation such as protocol-owned NFT minting.

Boosting DeFi Yields Using NFTs

The quest to maximize returns makes DeFi clicks. The investor fun relies partly on the underlying blockchain and how innovative the team is. The decision to launch on the rapidly expanding Fantom is strategic. By mid-January 2022, over $7.5 billion worth of assets were under management in the low-fee and scalable blockchain. This means the ecosystem is vibrant, and the FTM coin is one of the most liquid due to the high capital flow. 

ProtoFi is tapping on what Fantom has to offer and is integrating NFTs in supported pools, expanding yield farming ROI. According to the development team, the purpose of meshing NFTs in pools is to purposefully boost yields while allowing the holder to strategize and earn more. For example, ProtoFi's NFT holders could stake or burn their digital assets to boost ROI. 

The yield increase depends on the rarity of minted NFTs. The rarer, the more boost there is for token holders.

NFTs with Varying Rarity

The integration of NFTs in supported pools will be a gamechanger, given the impressive numbers behind DeFi and NFTs. Notably, the importance of ProtoFi's dual-token system will also be brought to the fore since NFTs would be minted using FTM or PROTO. 

Interested investors seeking to turbo-boost their ROI can choose to purchase any of the five types of ProtoFi's NFTs distinguished by rarity ranging from Common—which has the highest supply—to the Mythical—which is rarest and the most valuable expected to boost any pool by the highest ROI offered. 

All NFTs are designed to match the platform's theme. The ProtoFi's NFT mechanics is also structured, as aforementioned, to allow the holding or burning of multiple NFTs to boost the holder's APR concurrently. 

Protecting the Investor

ProtoFi has instituted various mechanisms to shield investors, ensuring that high yields aren't negatively impacted. The ProtoShield is an anti-whale monitoring system to protect against block sales. 

At the same time, the ChronoLock introduces a variable harvest lock-up preventing consistent selling pressure on reward liquidation. Furthermore, the protocol has a dynamic elastic supply to support PROTO prices continuously.

But one of the most interesting function aimed to decrease the token inflation is given by the so called Quantum Supply Mechanism: an automatic mechanism that changes the Protocol token emission based on the ratio between the current Market Cap and the Total Value Locked in the Protocol, one of the most used indicator in the DEFI ecosystem.

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Edward Moon
Edward Moon

Crypto trader and analyst.

Analysis From Moon
Analysis From Moon

Analysis From Moon

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