JPEG'd connects DeFi with NFTs by letting Cryptopunk holders open NFDPs and use their punks as collateral. Participants deposit their Cryptopunks into a smart contract, then mint a synthetic stablecoin, PUSd (pronounced: PUSS - dee). This approach turns their punks into liquidity and allows them to earn DeFi yield. In doing so, cryptopunks shift from being static holdings to yield-generating assets. The protocol is governed through a governance token, JPEG, which can oversee, administer, and adjust protocol parameters.

JPEG is a governance token without economic value. It exists purely for utility in protocol governance, meaning swapping tokens to the DAO yields a valueless governance token with no expectation of profit. JPEG holders can draft or vote on governance proposals that guide and supervise the protocol. Proposals can cover items such as altering vault debt limits, changing deposit and interest fees, adjusting insurance, modifying other fee structures, and approving higher credit limits for specific NFTs, among others.