What is JPEG’d? JPEG’d is a decentralized lending protocol on Ethereum that allows NFT holders to collateralize their assets to mint PUSd (the protocol’s stablecoin) or pETH (Ethereum derivative asset). What is special about this project? Let’s join Weakhand to find out what JPEG’d is in this article.
What is JPEG’d?
JPEG’d is a decentralized CDP platform on Ethereum that allows NFT holders to collateralize their assets to mint PUSd (protocol stablecoin) or pETH (Ethereum derivative asset).
Currently the JPEG’d platform only supports collections:
- CryptoPunks
- EtherRocks
- Bored Ape Yacht Club
- Mutant Ape Yacht Club
- Doodles
- Azuki
- Pudgy Penguins
- Clonex
- Autoglyphs
JPEG’d uses a peer-to-peer protocol lending mechanism, NFT prices are priced at floor prices and guaranteed by Chainlink Oracles. This means that the protocol is not dependent on any liquidity provision or external factors.
Other than tokens in each NFT collection there are some NFTs that are rarer than the rest in the collection. So JPEG’d is working on and will be adding trait multipliers to CryptoPunks and Bored Apes Yacht Club (BAYC) to accurately assess the value of specific rare items.
JPEG’d Working Model
The operating process goes as follows:
- Users deposit their NFT into a JPEG’d platform.
- After protocol confirmation, users can choose to mint PUSd or pETH, users can only choose 1 of the 2 and cannot mint both at the same time. By default, users can borrow 35% of the collateral value. However, JPEG’d has a number of methods to increase LTV (loan-to-asset value ratio), which I will present in detail in the following section.
- When wanting to repay the loan, users need to pay the initial amount of loan tokens + 1 portion of the loan fee to receive their NFTs back.
- For PUSd Fee: 2%/year
- For pETH Fee: 5%/year
Liquidation mechanism: Liquidation will take place if the default debt/collateral ratio is 36% or higher. JPEG’d will proceed to put users’ NFTs up for auction.
For example: If an NFT is worth 100 ETH, users can borrow up to a maximum of 35 ETH. If the value of the NFT collateral decreases slightly or the user takes out additional debt that changes the debt/collateral ratio to or exceeds 36%, he or she will be liquidated.
- 5M JPEG tokens in the auction contract
- 1 NFT JPEG Cards in auction contract
- 1 JPEG Cigarette in loan contract
Auction participants’ assets will be locked for 7 days to ensure the auction process.
Buyers will begin bidding until there are no higher bids left. The last bidder, who is also the highest bidder, will receive the item.
What’s the Difference in JPEG’d?
Insurance: Users can voluntarily purchase insurance on any loan they open. Insurance is a 5% non-refundable fee assessed when the initial debt is taken out and any new debt thereafter. If they are liquidated, they can redeem their NFTs from the DAO after repaying the outstanding debt and a 25% liquidation fee. The 25% liquidation fee is based on the user’s outstanding debt, including principal plus any accrued interest.
For example: The user chooses to buy insurance and opens a CDP for PUSd 10,000. A 5% premium along with a 0.5% deposit fee was assessed and he received PUSd9,450. Ultimately, the debt on this position increased to PUSd 15,000 and the user was liquidated due to adverse market conditions. Users must repay the outstanding debt of PUSd 15,000 plus liquidation fee of 3,750 (25%) to the DAO. Once the DAO receives these funds, the NFT will be returned to the user.
When a user’s NFT is liquidated and the user previously purchased insurance, JPEG’d will give the user a certain amount of time to repay the debt and receive the NFT back. After this time, the user’s NFT will be auctioned.
Increase LTV on loans: By default, normal LTV is 35%, users can increase LTV to a maximum of 60% by:
- Traits Boost Lock
- LTV Boost
- Cigarette Boost
For Traits Boost Lock: By locking JPEG tokens, borrowers can increase the LTV of rarer NFTs. The LTV factor depends on the rarity of the NFT and the average value at which the property has traded above the floor over the collection’s history. Everyone can see details here.
For LTV Boost: Locking JPEG tokens, the cost will be 20% of the increased value of the increased limit, and the time of locking JPEG tokens is decided by the borrower, the borrower can increase LTV by 15%.
For example: User owned 1 NFT has a floor price of 100 ETH
Suppose JPEG token price = 0.0006 USD, ETH token price = 1,000 USD
Users can borrow out 35 ETH when pledging their NFTs.
To increase the loan to 50 ETH, it is necessary to lock up 15 ETH x 20% = 3ETH = 5,000,000 JPEG tokens.
For Cigarette Boost: NFT JPEG Cards have a JPEG’d Cigarette attribute that can be used as a lock for a 10% loan LTV increase.
Combine LTV Boost and Cigarette Boost Helps borrowers increase LTV up to 60%, liquidation rate is now 61%.
Core Team
The project development team includes:
Investor
JPEG’d has successfully raised $2M from advisors. In addition, JPEG’d raised $69M USD from the Public Sale round on February 26, 2022.
Tokenomics
Basic information about PUSd token
PUSd is the native stablecoin of the JPEG’d protocol. It is minted when users borrow with their NFTs and burned when they decide to repay their loan.
Users can bring PUSd to provide liquidity on Curve with the 3Crv pair (combining USDC, USDT and DAI).
Basic information about pETH token
pETH is an Ethereum derivative backed by the JPEG’d protocol. It is minted when users borrow with their NFTs and burned when they decide to repay their loan.
Users can bring pETH to provide liquidity on Curve with the pETH/ETH pair.
Basic information about JPEG tokens
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Token Name: JPEG’d
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Ticker: JPEG
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Blockchain: Ethereum
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Token Standard: ERC20
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Contract: 0xE80C0cd204D654CEbe8dd64A4857cAb6Be8345a3
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Token Type: Governance
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Total Supply: 69,420,000,000 JPEG.
Token Allocation
- 30% is generated in the donation event
- 35% is allocated to DAO
- 30% Team
- 5% Advisors
Token Release
Team and Advisors tokens are locked for 6 months from the end of the donation event (March 1, 2022) and distributed linearly for 2 years.
Token Use Case
JPEG’d is a token used to:
- Voting on proposals (PIP)
- Participate in the auction on JPEG’d
- Increase LTV of NFTs.
- Used as a bribe for CVX and veCRV holders voting in the JPEG/pETH Pool on Curve Finance.
- In the future, it is possible to use JPEG Token as collateral to mint pETH or pUSD.
Audits
JPEG’d has been audited by Quantstamp and PeckShield. Everyone can refer to the detailed link here.
Exchanges
JPEG can be traded on both DEX and CEX exchanges such as: SushiSwap, Uniswap (V3), Curve Finance, MEXC, …
JPEG’d Project Information Channel
- Website: https://jpegd.io/
- Twitter: https://twitter.com/JPEGd_69
- Medium:
summary
JPEG’d is one of the first CDP platforms for NFTs on the Ethereum ecosystem. With continuous weekly updates, it shows the team’s enthusiasm and dedication to the project. Above is all the information I want to provide about JPEG’d, hope everyone has received useful knowledge.