Research Summary
This report provides an in-depth analysis of the Amber Token, specifically JPEGd, and its comparison with ETH. The report discusses JPEGd’s low cost of borrowing, its ability to innovate and deliver, and its valuations versus uncertainties such as the yet to be launched xJPEGd, emissions, and protocol risks. JPEGd is an NFT lending platform that allows NFT holders to unlock capital by using their NFTs as collateral.
Key Takeaways
JPEGd’s Position in the NFT Lending Market
- JPEGd’s Unique Mechanics: The report highlights JPEGd’s unique mechanics, which are expected to make it a key player in NFT lending as NFTfi grows, drawing parallels to traditional art lending.
- Overall NFT Market Growth: The overall NFT market is set for growth, and NFT finance NFTfi is expected to be a lasting feature. The traditional art secured lending market size and the rise of young collectors with an understanding of NFTs underline structural tailwinds for the development of an NFT lending market.
- Technological Developments in NFTfi: Technological developments in NFTfi fare well for the future growth of NFTs. With NFT trading platforms, instant liquidity venues, platform aggregators NFT futures, and NFT lending protocols, the report suggests that NFTs and its lending market will experience outsized growth.
JPEGd’s Competitive Dynamics
- Product Market Fit: JPEGd, along with competitors such as NFTfi, BendDAO, and X2Y2, have existing products in the space and arguably, Product Market Fit (“PMF”).
- Loan Mechanics: JPEGd’s loan mechanics stand out against that of NFTfi X2Y2 and BendDAO. JPEGd uses NFTs as collateral to issue its own overcollateralized stablecoin (PUSd) and ETH synthetic (pETH).
- Innovations: JPEGd innovations such as NFT trait specific lending limits and a two-tier lending market to meet increasing borrowing demand for pETH distinguishes the JPEG platform from peers.
JPEGd’s Revenue Drivers and Growth Prospects
- Revenue Drivers: JPEGd revenue drivers include deposit fee for debt drawn, interest on debt, insurance fee on debt drawn that allows a 72 hours buyback of the NFT in case of liquidation, liquidation fee on debt drawn if insurance is exercised and liquidation profits.
- Growth Prospects: The report suggests that JPEGd looks attractive with considerable growth prospects given its position as a key piece of infrastructure in NFTfi, and the state of its treasury value.
Actionable Insights
- Investigate JPEGd’s Position: Given JPEGd’s unique mechanics and its position in the NFT lending market, it may be worth investigating its potential for growth and innovation in the NFTfi space.
- Consider JPEGd’s Competitive Dynamics: JPEGd’s loan mechanics and innovations set it apart from its competitors, suggesting potential for further growth and market dominance.
- Assess JPEGd’s Revenue Drivers and Growth Prospects: JPEGd’s revenue drivers and growth prospects make it an attractive option for those interested in the NFT lending market.
