Introduction
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We’d like to share the exact time of the Token Generation Event (TGE) and plans for the future of the JPEG’d protocol in this post.
The TGE will begin at 00:00 UTC Saturday, February 26th (approximately 2 hours from now) and will last for 3 days. You can send ETH or USDC and will receive JPEG tokens in return upon conclusion. The link to the TGE is here. Additional details about the TGE is here.
The JPEG’d protocol is already built, audited, and we are internally testing and finalizing the UI for the protocol. As we launch formally, we will add support for CryptoPunks, EtherRocks, and shortly thereafter Bored Ape Yacht Club NFTs. We are still working on integrating BAYC to the protocol but are working hard to do so, and anticipate we will finalized shortly after formal launch.
But some plans we have for the JPEG’d protocol are as follows:
- Liquidation free vaults
- More utility for the JPEG governance token
- Additional NFT collections added to the protocol
- Permissioned Liquidators
- We are also exploring a decentralized perpetual futures product on key NFT collections.
Liquidation Free Vaults
Users will be able to deposit into vaults, with no chance of liquidation, and earn a return on their NFTs. This is done by constantly monitoring, and changing the debt drawn from these NFTs based on their fluctuating valuations. Users can withdraw their NFTs (likely within a 24–48 hours), and the debt drawn from these NFTs never exceeds the amount of assets needed to fully pay back debt. In other words, this vault will never make the JPEG’d protocol undercollateralized. In exchange for liquidation free vaults, users will likely earn a lower return than participating in the vaults subject to liquidation. But in our minds, any return without risk of liquidation is an attractive product.
More Utility For the JPEG Governance Token
We are exploring additional mechanisms that give the JPEG governance token more utility. These may include veJPEG locking/staking module, enabling increased credit limits on loans by locking the JPEG token, reduced interest rates, or other mechanisms that give the token utility outside of pure governance.
Additional NFT Collections
The NFT market is growing rapidly and we aim to provide a market fit for all the new valuable NFTs that are being created. Our team is strategizing how to best add these NFTs to the protocol while still ensuring all debt remains overcollateralized. Some NFTs we are exploring are Azukis, Clone X, Mutant Ape Yacht Club, Parallel cards, and others.
Permissioned Liquidators
All debt issued by the JPEG’d protocol is fully collateralized at all times. The overcollateralized nature of loans issued in the decentralized finance space helps mitigate the risk of any bad debt incurred. To help scale the protocol we will onboard permissioned liquidators that will be other DAOs, market makers, large funds, and even large individual whales.
These liquidators will be whitelisted alongside the JPEG’d DAO to conduct liquidations on any positions that trigger such thresholds. Liquidators will share half the liquidation fee with the DAO along with their principal back. A permissioned liquidator set will help us scale aggressively while still ensuring loans are always overcollateralized. Further, users will still retain the ability to purchase insurance and rebuy their NFTs (with a fee) if they do get liquidated.
Decentralized Perpetual Futures Exchange
Currently there is no way for users to speculate on floor prices of their favorite NFT collections. We will utilize oracles secured by Chainlink nodes for key NFT collections that will be used for valuations, important for the lending component of the JPEG’d protocol. But we are taking it one step further, by exploring options to build a decentralized futures perpetual exchange on these collections. Traders will be able to long or short floor prices of key collections, or hedge their positions if they own the underlying NFTs. The Index price will likely be determined by oracles secured by the Chainlink network. We are exploring this decentralized exchange on the Arbitrum Network due to reduced gas fees and fast confirmation times.
A Note On The JPEG Token
The JPEG token is a valueless governance token that is used to vote on proposals that shape the JPEG protocol. It is also used to lock and increased the credit limit of selected NFTs approved by governance. There is some confusion on what else the token can do so we want to clarify. Since JPEG is a governance token, tokenholders can vote on changing interest rates, loan-to-value (LTV) levels of collections, liquidation fees, all other fees on the protocol, and can vote to determine where fees from the JPEG protocol will go. The JPEG’d protocol earn fees from deposits, interest, liquidations, arbitrage on liquidity pools involving pUSD (native stablecoin of the JPEG’d protocol), and earnings from idle assets held in Treasury. As more loans are issued, the JPEG’d protocol earns more fees.
Link to the Token Generation Event is here.
