JPEG Tokens LTV Lock

Discussion around a potential PIP to use JPEG tokens to increase LTV for collections

Abstract
Enable users to lock JPEG tokens to increase LTV for supported NFT collections by 15%

Background
User can borrow up to 35% of the NFT value on the JPEG’d protocol. With a staked JPEG Card with cigarette attribute they can borrow up to 45% of the NFT value. By enabling users to lock JPEG tokens they can receive an additional 15% LTV increase for a total of 60% LTV of the value of the NFT. We believe gives more demand to JPEG tokens and also allows borrowers to access higher lines of credit.

Specifications
Users would select the lock period they desire (1 week, 1 month, 1 year etc.). To increase LTV by 15% the user would lock 20% of the incremental value in JPEG for the lock period. If they do not re-lock the JPEG or start a new lock the 15% boost would no longer be valid and their LTV max would revert to either 35% or 45% (depending if they have a JPEG Card with cigarette attribute staked).

Example:

100 ETH floor collection
35 ETH = max borrow with no JPEG Card
45 ETH = max borrow with staked JPEG Card
60 ETH = max borrow with staked JPEG Card and locked JPEG tokens
Assumed JPEG token price = $0.0006
Assumed ETH price = $1,000

Increase in credit limit due to locked JPEG tokens = 15 ETH x 20% cost (in JPEG tokens) = 3ETH / $0.0006 = 5,000,000 JPEG tokens.

With a 3 ETH cost you essentially unlock an additional 15 ETH of credit.

4 Likes

This is a great addition to the potential of JPEG’d and allows to securely unlock more capital for borrowers as well as creating utility for the JPEG token.!

I’m in favour of this proposal.

4 Likes

yeah sounds good but maybe give them the option to either stake JPEG card or lock up JPEG tokens per step so

very much in favor of proposal
Example:

100 ETH floor collection
35 ETH = max borrow with no JPEG Card
45 ETH = max borrow with staked JPEG Card OR lock JPEG tokens
60 ETH = max borrow with staked JPEG Card and locked JPEG tokens

I love this feature. Will max lock JPEG token and rise the demand

2 Likes
  1. I would like to clarify that this additional 15% of LTV by locking tokens only applies if you already have a cig card or does this 15% LTV increase happen independently of whether you staked a cig card or not?

  2. How does this work with the trait locking for cryptopunks, is this stackable? with the trait locking or in addition to? Meaning, if you have a cryptopunk with a trait multiplier, does this stack on top of that trait multiplier or not?

Any chance we could increase the boost to 20% or does that introduce too much risk into it? Would be 1% LTV for 1% of the value in jpeg, feel like that fits but unsure of the risk to it.

Would it be possible and what do you guys think about having the timelock determine the boost? lock for 1 year get 25%, lock for a month get 20%, lock for a week get 15%. Depositors would then be incentivized to lock tokens for longer periods of time.

You don’t need a cig card, it just stacks with the cig card.

It also stacks for trait locking.

3 Likes

just an idea, we pretty much have conservative customers happy.

The extra 15 percent LTV with tokens will make them even happier while giving tokens utility, so I like this

However, can we ALSO offer for degenerate customers an option of getting an extra 25 to 30 or whatever amount higher than the standard 15 LTV using tokens?

If customers get liquidated or withdraw they would have to pay the treasury some sort of fee from the tokens locked up instead of being able to withdraw it like you could with the standard 15 LTV

To evaluate what affect this would have on JPEG demand, I simulated out some simple scenarios.

Dynamic elements are ETH, JPEG price pulled from cryptoprices.cc and JPEG tokens in LP, pulled from Dexscreener API.

Would be interesting to evaluate what the takeup rates of this when it passes and compare it to this simulation.

3 Likes

Following on this, would it be interesting if the JPEG liquidation fee for degen loans is actually burned, effectively reducing JPEG supply over time?

2 Likes

Great idea, let’s burn them all!

1.) Burning tokens benefits all hodlers.

2.) Keeping the tokens, but designating them specifically for bribes, benefits borrowers who stake in the bribed pool.

3.) Keeping the tokens, but designating them for Citadel rewards extends the lifetime of Citadel rewards and benefits the core borrowers who also contribute income to the platform.

4.) Keeping the tokens, but designating them for rewards specifically on JPEG/pETH or JPEG/ETH pools benefits those who provide liquidity to the token.

I would lean more to (3) or (4).

2 Likes

You can do all four? It doesnt have to be a case of only one group benefiting.

Also what do you think of something like this

lets say we offer Increase LTV by 30% the user would lock 20% of the incremental value in JPEG for the lock period, however if liquidated the Dao collects your NFT + the tokens(partial? or all?) you had locked.

What happens with the tokens? Depends on how the auction goes. If the team makes the money it lent out back with the auction then we can do whatever we want with the tokens risk free. If we are still down from our loan then we would convert only the amount of tokens needed to break even.

The remaining tokens Could be divided into those 4 groups you mentioned burning, building/bribes, citadel rewards, rewards for pools, and of course xjpeg rewards when that is up and running. (is it possible to code this so it happens automatically?)

If there is no liquidation and someone withdraws we introduce a withdrawal fee to compensate the dao for the risk it took on, and then those tokens would be divided up the same way as i described above.

this is meant to be built with the standard “Enable users to lock JPEG tokens to increase LTV for supported NFT collections by 15%”

Basically the 15 LTV from tokens would be a conservative approach(since you’re not risking your tokens) and the 30 LTV would be the degen approach since you risk losing your tokens too.

Hopefully by adding a degen option we could take away customers from platforms that only specialize in degen.

(also the numbers i used were arbitrary and could be changed into whatever makes the most sense)

1 Like

Something to explore after launch if it passes.
I like 3 and 4 more than token burning, basically becomes a self sustaining system.

We were told by the devs on the 20th during voting that the tokens required to lock would stack. That wasnt the case.

The issue here is people voted and bought tokens given the info the tokens required to lock would stack.

Another issue here, since the tokens arent required to stack it essentially makes token trait lock pointless as a utility for token holders.

Another concern is your discord banned people for asking about this.

What is going on here?