The JPEG’d lending protocol is DeFi meets NFT. Now, lenders can access the platform’s CryptoPunk vault.
The vault is pegged at a $5m debt ceiling, the team also indicates plans to expand the debt ceiling to $10m by next week.
JPEG’d vaults for other NFTs; Apes, Azukis, Ether rocks, Clone X and Doodles is upcoming.
JPEG’d has launched its lending protocol in a historical DeFi meets NFT moment. Users will now have access to a line of credit with their NFTs as collateral. All of this is backed by the Blockchain technology which will facilitate these transactions in a permissionless, trustless and decentralized manner.
The platform has come a long way since its launch and introduction of its DeFi primitive; non-fungible debt positions (NFDP). The protocol manages to eliminate counterparty risks associated with other peer-to-peer NFT lending protocols by adopting a peer-to-pool lending approach.
The JPEG’d Lending Protocol
For now, users can utilize the lending protocol via the CryptoPunk vault. The Punk NFT vault currently has a $5m debt ceiling, however, after a week, the debt ceiling will be increased to $10m. The protocol roughly works this way; first, users deposit their Punks into a smart contract in order to be able to mint PUSd, a synthetic stablecoin.
The minted stablecoin then serves as liquidity from the CryptoPunks deposited, giving users the opportunity to earn yield. Think of it as a lending platform bridging the NFT – DeFi gap, effectively transforming static investments into yield-earning products.
JPEG’d also operates on a considerably low interest rate for borrowing PUS’d, at 2% and employs a novel insurance mechanism. Additionally, users are able to borrow up to 32% of the floor price in PUSd. JPEG, JPEG’ds native coin and governance token, backs and oversees activities pertaining to the protocol.
Users with JPEG’d cards (JPEG’d NFTs) with cigarette attributes can also stake their NFTs on the lending protocol to increase their borrow limit.
Future Updates On The NFT Lending Platform
From the teams announcement, the EtherRocks vault is to come next. Vaults for other NFT collections such as Bored Apes, Azukis, EtherRocks, Clone X and Doodles are also in the works. `