What is Protocol Labs?

Protocol Labs is a global research and development organization behind major Web3 projects like IPFS, Filecoin, and libp2p. They focus on decentralized infrastructure and blockchain technology innovation.

What is drand and Randamu?

drand is an open-source, publicly verifiable randomness beacon stewarded by the League of Entropy. SproutVest helped commercialize this research technology into Randamu, an independent venture that provided verifiable randomness for gaming, governance, and blockchain consensus.

What is an Entrepreneur-in-Residence (EIR)?

An EIR is a strategic leadership role where an experienced entrepreneur evaluates commercial potential, defines go-to-market strategy, and leads venture formation. SproutVest served as EIR for Protocol Labs to help spin out their drand research project into the commercial venture Randamu.

How long was the Protocol Labs engagement?

The Protocol Labs engagement lasted 12 months, during which SproutVest provided Venture Formation, Product Strategy, and EIR Leadership services to help commercialize cryptography research into viable Web3 ventures.

Case Study

Protocol Labs Blockchain Ventures Case Study | SproutVest

At a glance

Client: Protocol Labs
Industry: Decentralized Infrastructure / Web3 / Venture Incubation
Engagement: 12 months
Services: Entrepreneur-in-Residence (EIR) Leadership, Venture Formation, Product Strategy, Cryptography Commercialization
Headline result: The drand research project spun out as Randamu with $3.3M in pre-seed funding

Context

Protocol Labs, the research and development organization behind IPFS, Filecoin, and libp2p, wanted to turn its most promising internal research into independent commercial ventures. The candidate was drand, an open-source, publicly verifiable randomness beacon stewarded by the League of Entropy, a consortium of leading cryptography and research institutions. Protocol Labs engaged SproutVest through its Entrepreneur-in-Residence program, with Erick Watson tasked with evaluating drand’s commercial potential, defining a go-to-market strategy, and leading the spin-out.

The challenge

drand was widely adopted as free public infrastructure, which is precisely what made it hard to commercialize: it had no monetization model, and any commercial strategy had to preserve the public good that gave it credibility. The team needed to identify use cases, such as verifiable randomness for gaming, governance, and blockchain consensus, where the technology created defensible value someone would pay for. The spin-out itself was legally and organizationally delicate, involving academic institutions, industry partners, and IP transfer, and it required keeping Protocol Labs, the League of Entropy, and future investors aligned throughout.

What we did

SproutVest built the commercial case first, analyzing the blockchain, gaming, fintech, and privacy-tech markets to find where publicly verifiable randomness could unlock real demand, and validating that demand directly with prospective customers including Layer 2 networks, DAOs, and game studios. From that analysis we defined the product vision for what became Randamu: secure, unbiased, verifiable randomness as a foundation for Web3 infrastructure, gaming fairness, and off-chain verifiable compute.

We then led the spin-out mechanics, guiding the formation of a new Swiss-based entity, establishing its governance under the Swiss Threshold Association, and coordinating the IP and team transition out of Protocol Labs. With the Protocol Labs Venture Studio team, we designed the pre-seed funding structure, investor narrative, and strategic roadmap for the new company.

Results

In 12 months a public-good research project became an independent, funded company, and Protocol Labs gained a repeatable playbook for doing it again:

Randamu launched as an independent venture built on drand’s technology
$3.3M in pre-seed funding raised, led by Protocol Labs Venture Studio
Governance established under the Swiss Threshold Association, with IP and team transitioned cleanly
A repeatable venture incubation process that Protocol Labs could apply to future research spin-outs

The work above starts with an honest read of the leadership behind it

The Trellis Leadership Diagnostic applies that discipline to how you run your company: 24 scored items across six dimensions, a written report with one 90-day priority, and a 90-minute debrief with Erick Watson. $2,500, fully creditable against coaching.

Take the Leadership Diagnostic →

Exploring a fractional or advisory engagement instead? Book a discovery call →