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Minting a Protonaut

Protonauts offers a relatively new, but not novel, idea of using a project-based Treasury contract to build an onchain ecosystem through various mechanisms that align the project with the growth of Ethereum.

Protonauts can always be burnt for their original mint price

How Minting Works​

When a user mints a Protonaut, the following process occurs:

  1. The user mints a Protonaut for USDC
  2. The USDC is sent from the Protonaut Factory to the Treasury contract
  3. The Treasury contract deposits this USDC into a curated Morpho Vault

Yield Generation​

The USDC deposited into the Morpho Vault accrues yield over time. This creates a sustainable economic model for the project:

  • The vault continuously generates yield from the deposited USDC
  • The project admin/owner can withdraw this yield to fund development and ecosystem growth
  • User principal remains secure in the vault

Redemption Mechanism​

A key feature of Protonauts is the ability for users to redeem their initial investment:

  1. User burns their Protonaut NFT
  2. Burning triggers the withdrawal function from the Morpho Vault
  3. The original USDC amount is returned to the user

This redemption mechanism creates a price floor for Protonauts, as they can always be redeemed for their original mint price. It also builds trust with users by ensuring they can exit their position if desired.

Economic Benefits​

This treasury system creates several advantages:

  • Sustainable Funding: Project development is funded through yield rather than depleting the treasury
  • Price Floor: The burn-to-redeem mechanism establishes a minimum value for each Protonaut
  • Aligned Incentives: The project benefits from Ethereum's growth and the success of Morpho's yield strategies
  • User Security: User funds remain accessible through the redemption process