Chainlink price feed will be used to power DeFi services on JPEG’d, a lending protocol that allows Owner NFT the opportunity to receive credit on their properties while retaining ownership of them.
The Chainlink oracle network provides smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations to enable feature-rich applications. The protocol currently secures tens of billions of dollars on DeFi, insurance, games and other major industries.
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According to a release shared with livetechit, JPEG’d is merging the time-tested Collateral Debt Position (CDP) model with NFT Collateral to enable a new DeFi stub called Unavailable Debt Position (NFDPs). Despite JPEG’d, users will be able to mint a decentralized stablecoin called PUSd that is fully collateralized with their NFT.
Like all lending and borrowing platforms, maintaining its solvency requires a secure decentralized oracle solution to accurately price NFTs used as collateral. challenge. Due to their unique non-fungibility, the nature of NFT’s liquidity (or often lack of it) differs from that of the replaceable ERC20 tokens.
To bridge the two ecosystems, JPEG’d is working with Chainlink to launch a custom decentralized oracle solution for NFT asset pricing, starting with CryptoPunks.
This Chainlink price feed will be the foundation for the JPEG’d platform, serving as a new DeFi platform allowing users to leverage their existing NFTs as collateral to receive loans, all both in a reliable and permissionless way of mitigation.
How it works?
For the initial integration, the Chainlink Price Feed will quantify the Time Average Price (TWAP) of both the selling price and the floor price to produce a combined price that will be used to set the price floor. This magic does not include wash sales, exceptions and will be periodically written on-chain by Chainlink’s network of decentralized node operators.
Using TWAP helps to reduce outlier events by taking the average of multiple sales over a predetermined period, making manipulation significantly harder and more expensive.
Additionally, by tracking only the average price of the lowest priced exchange CryptoPunks (in other words, everything but apes, aliens, and zombies), the protocol can help prevent the problem of users borrowing money more than their NFT amount is actually worth.
This helps to solve the problem of variable pricing for different NFTs in a set using the least common denominator. Details will be provided at launch.
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