Abstract

This proposal aims at modifying 2 features of JPEG’d: the base LTV and the design of JPEG Boosts.

JPEG Boosts is a great feature, enabling extra LTV, and higher credit limit for rarer NFTs. It could be made even better. The proposed updates include:

• modifying the lock expiration mechanism;
• defining a Max Boosted LTV per collection;
• increasing the liquidation buffer from 1% above the Base LTV to 11% above the Base LTV (up until the Max Boosted LTV).

The current base LTV on JPEG’d is lower than the competition and would be raised to match the rest of the market (ie 35% to 60% for Cryptopunks).

The proposal aims to have the following impact:

• Make JPEG’d more attractive for borrowing by aligning the base LTV
• Reduce user friction when creating boosts all while maintaining the JPEG boost as a supply sink

Background

Base LTV

JPEG’d current base LTV is lower than the competition. To make JPEG’d more attractive to borrow the base LTV of selected collections should be raised,

JPEG Boosts

The introduction of JPEG boosts has been a success, with around 1.5B tokens currently locked on JPEG’d and boosting positions. Traits boosts have also been borrowed by other platforms. The current design has friction and adds complexity to the user’s decisions when borrowing and boosting.

• They have to take on the JPEG price movements into account for the time of the lock, which creates unknown costs
• The moment the locks disable can lead to instant liquidations (although the introduction of the JPEG alert mitigates this now)

This is not yet an ideal UX and would be greatly improved if the below changes are implemented.

Specifications

The following changes would be introduced to the LTV boost mechanics:

• increasing the base LTV of select collections to match the competition as per the table below.
• allow JPEG LTV boost to reach max LTV without the cig boost
• introduce a Max Liquidation Threshold to cap LTV when the cig boost and the LTV boost are combined
• add a buffer for liquidation of 11% beyond the Base LTV up to the Max Liquidation Threshold rather than 1% like currently
• replace the time-lock on the boost to make it perpetual and add a processing delay of 7 days for withdrawals (i.e., the user would place a request for withdrawal which would disable the boost in 7 days and unlock the JPEG tokens)
• Allow canceling a withdrawal request
• Existing JPEG Boosts will be marked as having a withdrawal requested and their unlock time will be the current unlock time set when the boost was created. Users can cancel the withdrawal request anytime and transform the boost in a perpetual boost.

To complete this update this proposal suggests increasing the base LTV of the selected collections to make them in line with the competition. This would make JPEG boosts more competitive as they would unlock more capital than what’s available elsewhere.

The other parameters for enabling boosts would remain the same:

• The amount of JPEG to lock is calculated the same as before, keeping the value in ETH of $JPEG to lock consistent, independent of the USD price of $JPEG.
• Each collection has an independent max LTV boost and base LTV
• Cig Boost and LTV Boost can still be combined up to the Max LTV and Max Liquidation Threshold

To ensure smooth operations, enable the team to update base LTV and max boost of the different collections.

| Collection | Current Base LTV | Future Base LTV | Max LTV Boost | Cig Boost | Base Liquidation Threshold | Max Boosted LTV | Max Liquidation Threshold | | --- | --- | --- | --- | --- | --- | --- | --- | | Cryptopunks | 35% | 60% | 20% | 10% | 71% | 80% | 81% | | BAYC | 35% | 60% | 20% | 10% | 71% | 80% | 81% | | MAYC | 35% | 50% | 20% | 10% | 61% | 70% | 71% | | BAKC | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Meebits | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Pudgy Penguins | 35% | 50% | 20% | 10% | 61% | 70% | 71% | | Milady | 35% | 50% | 20% | 10% | 61% | 70% | 71% | | Doodles | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Azuki | 35% | 50% | 20% | 10% | 61% | 70% | 71% | | Clonex | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Autogylphs | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Fidenza | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Ringers | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Chromie Squiggles | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Otherdeeds | 35% | 40% | 20% | 10% | 51% | 60% | 61% | | Etherocks | 35% | 40% | 20% | 10% | 51% | 60% | 61% |