Throw the rice: A successful NFT-crypto protocol marriage
Another Successful Crypto + NFT Marriage: Olympus Pro DAO
JPEG’d is an NFT service that is diving into Olympian liquidity pools with a novel NFT based-protocol. The focus will be to use bonds for liquidity. ERC-721 is the General Token protocol on which NFTs are based. Olympus DAO will help regulate the JPEG program for the ETH/JPEG liquidity pool in addition to stabilizing token value. Hosted on SushiSwap, those who hold JPEG ERC-721 tokens (that is, JPEG NFTs or other NFTs involved as determined by the collaborative communication between Olympus DAO and JPEG) will be allowed to more easily purchase or sell said NFTs without compromising the liquidity of the pool.
Maintaining deep liquidity oftentimes requires expensive incentives from the host protocol (in this case Olympus DAO), but this NFT based-protocol will only initially offer incentives to those who provide liquidity to the pool in the form of staking a JPEG pool liquidity token with ETH.
The host protocol will gradually reduce incentives while also increasing its percentage owned of the pool. Facilitated by Olympus Pro DAO, those who own the JPEG’d DAO ETH/JPEG staked pool liquidity tokens will receive discounted JPEG NFTs (otherwise known as “spot trading”).
This process is also known as bonding seeing as what would be traditionally considered a bond (in this context it would be a person buying the JPEG’d DAO ETH/JPEG staked coins for a future discount on JPEG NFTs). In this case, yield rates for JPEG’d ETH/JPEG token holders will correlate with JPEG spot pricing in addition to being appropriately calculated by Olympus DAO using methods that will ostensibly stabilize liquidity token value. Olympus DAO receives a flat 3.3% fee for each JPEG/ETH bond transaction.
This protocol is novel because NFTs could thus build credit. Owners of JPEG NFTs can participate in converting their NFTs into JPEG’d ETH/JPEG staked, liquidity pool tokens for governance power in the DAO, of course. But that’s not all. JPEG NFTs have the ability to earn credit in virtue of potential, future discounted JPEG NFT spot trading opportunities.
The person who bought the JPEG NFT will still maintain full ownership of the NFT itself and may display it in, for example, their OpenSea gallery. As an insurance mechanism, in the case of the pool’s forced liquidity, depositors will be able to entirely reclaim their JPEG NFTs from the DAO.