NFT Lending Protocol JPEG’d Teams With Chainlink for CryptoPunks-Backed Loans

NFT lending protocol JPEG’d is partnering with decentralized oracle provider Chainlink to enable borrowing using CryptoPunks as collateral.

Chainlink price feeds will power DeFi services on JPEG’d and give holders of the high-value NFT collection CryptoPunks the ability to get loans backed by their holdings, according to various tweets and multiple reports.

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“JPEG’d is merging the time-tested Collateral Debt Position (CDP) model with NFT collateral to enable a new DeFi primitive called Non-Fungible Debt Positions (NFDPs). Through JPEG’d, users will be able to mint a decentralized stablecoin called PUSd that is fully collateralized by their NFTs,” JPEG’d said in a blog post.

Before this move, the NFT ecosystem was mostly “siloed from the DeFi ecosystem,” per the post.

Read more: NFT Marketplace OpenSea Sees $3.4B Transaction Volume in August

NFTs — non-fungible tokens — are unique units of information that are linked to images or video and give holders singular ownership. The CryptoPunks collection by Larva Labs comprises 10,000 randomly generated 8-bit-pixel art images of punks, each with exclusive defining characteristics, on the Ethereum blockchain.

Some CryptoPunks have sold for millions of dollars, with one of the highest — CryptoPunk 7523, dubbed “Covid Alien” — fetching $11.7 million in a June Sotheby’s auction.

The Chainlink price feed will quantify the time-weighted average price (TWAP) of both sales and floor prices of the NFTs for a blended price that will serve to value floor punks. The price feeds will be the foundation that determines the size of the loans and liquidation dates.

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In August, NFT marketplace OpenSea recorded a $3.4 billion transaction volume on Ethereum, a tenfold increase from July. OpenSea’s most popular NFT collection is CryptoPunks, with Visa snapping up “CryptoPunk 7610” for roughly $150,000, PYMNTS reported earlier this month.