DeFi Digest: JPEG'd and NiftyOptions

Due to their nature, NFTs are often limited in accessing the growing DeFi ecosystem open to many fungible tokens. For example, while you can use ETH as collateral to take out loans or generate yield through staking, NFTs have very limited options in DeFi. The two new protocols mentioned in this piece are attempting to bring DeFi functionalities to NFTs. One provides a Compound-like lending protocol to the well-known CryptoPunks and another offers options contract creations for any NFTs.

JPEG’d is developing a lending protocol that will enable users to take out stablecoin loans against their CryptoPunks. JPEG’d will have its native stablecoin called PUSd, which is backed by a pool of assets to target a dollar peg. Users that deposit Cryptopunks as collateral in JPEG’d’s vault can borrow PUSd up to 32% of the value of their NFTs. The JPEG’d team will likely provide liquidity sources for PUSd through stablecoin exchanges like Curve for PUSd minters to access more mainstream stablecoins. PUSd minters will pay 2% annual interest, which can be adjusted. It is unclear who will adjust the annual interest, but it is likely going to be in the hands of JPEG’d’s DAO.