PRTRTS.XYZ Analysis
8/28/22 - Spizzerp
What is PRTRTS?
PRTRTS (Portraits) is a hold to earn NFT (non-fungible token) toted as a collateralized NFB (non-fungible bond) with unguaranteed monthly dividend distribution in USDT/USDC.
PRTRTS is uniquely designed to expire in 3 years, whereby all the funds garnered from the initial "mintvestment" held in the vault will be returned to holders during the NFB's maturity (10/01/25).
But rather than being passively held during this 3 year period, the PRTRTS vault will be actively managed as an on-chain investment fund ran by an entity called Equation.
Equation is a blockchain-based & invite-only democratic investment entity with the goal of generating profits. Profit distribution allocations are 35% to PRTRTS holders as interest, 30% designated towards an "Equation fee", and 35% added to collateral. With an emphasis on investing capital into both liquid and illiquid crypto assets and entities.
Equation homepage: https://www.eqtn.xyz/
What's an NFB?
NFBs (non-fungible bonds) offer floor price protection and yield generation opportunities to holders while allowing issuers the ability to avail term-based capital.
Unlike traditional NFTs, NFBs maintain a long-term financial relationship between issuer and holder until the stipulated period of maturity (PRTRTS = 3 years).
Learn more about NFBs here: https://www.himgajria.com/nfb#Introduction
Bond Agreement (legal doc): https://global-uploads.webflow.com/62c934c8de9a23d8441bdc68/62e5b98bdf58578860bf7477_Bond%20Agreement.pdf
Is there a track record of prior investment success?
Prior to PRTRTS, the Equation team actively managed an investment fund titled "RDCL" (Radical) from July of 2020 to July of 2021. During this timeframe, the Equation team was able to garner a return of 18x from an initial investment of $70K, ending the year with ~$1.5M.
An impressive feat, but a caveat must be noted here. During the same timeframe, crypto markets experienced favorable market conditions with most if not all projects experiencing astronomical growth in perceived value.
Note: So was the fund's initial success solely due to favorable conditions?
The team attributes the success of RDCL to a vague investment thesis titled "Ouroboros".
So what was RDCL invested in?
Main holdings included:
- $AMPL (Ampleforth) +745%
- Protocol that produces and burns an algo based, un-collateralized stablecoin pegged to $USD.
- $ETH (Ethereum) +840%
- A decentralized and open-source blockchain "platform" protocol with smart contract capabilities.
- $UMA (Universal Market Access) +220%
- A synthetic-asset protocol that allows users to recreate traditional financial products, crypto-based products, and more. Built upon $ETH.
- $UNI (Uniswap) +835%
- A blockchain-based asset exchange leveraging Automated Market Maker (AMM) mechanisms to retain its decentralized nature.
Other investments included:
Here's a deeper dive into RDCL's trading history:
- https://app.zerion.io/0x21b70ef84e18b03d5e289cc0db416aae1ddfb22b/history
- https://github.com/rdclxyz/Radical/commits/master/Portfolio.md
Is there a more relevant proof of ability?
Due to the beneficial market conditions experienced during RDCL's investment timeframe (07/20 - 07/21), an analysis of a more realistic view of Equation's investment capabilities is needed. Luckily the team has included their investment outcomes for the year of 2022, so far.
Note: I was unable to find further insights into the specific nature of the fund's investments for the current year. But current performance seems to better align with market conditions and my perception of how the fund would perform in a "realistic" market environment.
Any info on the team behind Equation?
Note: Not much is publicly shared about the Equation team but some limited info can be garnered via web sleuthing.
The only publicly announced member of the Equation team is their CIO (Chief Investment Officer), Him Gajria.
Beyond his immediate work experience, Gajria holds a degree in Business Administration & Management with an emphasis in Finance from Bangalore's Christ University. Gajria also serves as the artist behind PRTRTS and seems to have experience in design.
Equation also has a LinkedIn page. Though not much information is publicly divulged. But we can tell that their is at least 2 members employed by the team.
Gajria's Twitter: https://twitter.com/himgajria
How do I mint?
Initial investors are able to mint a "Canvas" during a defined two month period, from 08/01/22 to 09/30/22. Canvases act as the initial claim to a PRTRTS NFT which will replace the Canvas throughout a 6 month period post mint.
An unlimited allocation of Canvases can be minted up until the end of the mint date (09/30/22). As of now (08/28/22), there are 70 minted Canvases = $70k vault funding.
Mint Link: https://www.prtrts.xyz/
Canvas Agreement (legal doc): https://global-uploads.webflow.com/62c934c8de9a23d8441bdc68/62e59d319afb7e987786fad0_Canvas%20Agreement.pdf
Conclusion.
After taking a deeper dive into the project, I'd have to say that I have a ~70% conviction of its success.
Red Flags:
- Lack of transparency around Equation team members.
- Lack of concrete info around investment thesis (Ouroboros) and how its success can be properly replicated over a longer time horizon.
- Negative returns for the current year, 2022.
- Overall market instability & bearish sentiment.
Green Flags:
- Interesting & seemingly novel idea around NFBs.
- Very positive returns from initial RDCL initiative.
- Well documented investment records & plenty of informative material to educate investors.
Author's note: I hope y'all enjoyed reading my deeper dive into PRTRTS as an investment. This is not financial advice but rather a place to focus my thoughts and share them with the public