Protocol Labs Blockchain Ventures Case Study | SproutVest
At a glance
Client: Protocol Labs
Industry: Decentralized Infrastructure / Web3 / Venture Incubation
Engagement: 2023–2024
Structure: Began as a SproutVest contract and converted to a full-time Entrepreneur-in-Residence role at Protocol Labs
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 work began as a contract engagement and converted into a full-time Entrepreneur-in-Residence role at Protocol Labs as the spin-out took shape.
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
Inside a year 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 PLVS Capital
- 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
Randamu operated independently until 2026, when the company was wound down. The spin-out engagement itself concluded in 2024 with the venture funded, governed, and launched.
The work above starts with an honest read of the leadership behind it
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