1. Collateral

1.1. Introduction

JPOW aims to support a multi-collateral system, allowing users to deposit various assets to mint USDAI. The protocol classifies collateral into different risk tiers, each with a specific Loan-to-Value (LTV) ratio:

• AI Agent Tokens → 30% LTV
• AI Agent Tokens + USDC (combined collateral) → up to 60% LTV (upcoming)
• USDC Only → 95% LTV

1.2. Collaterals

Currently, JPOW supports three collateral tokens:

• MAX
• ORAI
• USDC

Collaterals are continuously monitored, and liquidation occurs if the collateral value drops below the required safety threshold. JPOW’s AI optimizes risk management, ensuring efficient utilization of collateral while maintaining protocol stability.

2. Minting USDAI

POW allows users to mint USDAI by depositing supported collateral assets into the protocol. The amount of USDAI minted is determined by the Loan-to-Value (LTV) ratio, ensuring a secure over-collateralization model.

Minting Process

1. Collateral Deposit – Users deposit eligible assets into the protocol.
2. LTV Calculation – The system calculates the maximum USDAI that can be minted based on the deposited collateral and its real-time market value.
3. USDAI Issuance – The protocol mints USDAI proportionally to the collateral value, within the LTV constraints.
4. Redemption – Users can burn USDAI to redeem their collateral.

USDAI can be used within the ecosystem for various financial activities, including payments, liquidity provision, and investment opportunities. The protocol enforces risk management through automated liquidation mechanisms, which trigger the sale of collateral if its value falls below a safe threshold, ensuring system solvency and peg stability.