Convertible JPY TokenPrice

(CJPY)

CJPY is a decentralized, over-collateralized stablecoin built on the Ethereum blockchain, designed to maintain a 1:1 value peg with the Japanese Yen. It is the core product of the Yamato Protocol, which was developed by the DeFiGeek Community Japan, a group dedicated to advancing Web3 technology. Unlike centralized stablecoins, CJPY is generated by users who deposit ETH as collateral into smart contracts. The name "convertible" highlights its mechanism where the token can be redeemed for the underlying ETH collateral at the pegged rate, ensuring it remains backed by real value.

The protocol maintains the CJPY peg through a combination of over-collateralization and arbitrage incentives. Every CJPY is backed by ETH collateral that exceeds the value of the tokens issued. If the market price of CJPY falls below 1 JPY, arbitrageurs are incentivized to buy the token at a discount to either repay their protocol debt or redeem it for 1 JPY worth of ETH. This creates market demand that helps drive the price back to its intended peg. The system relies on decentralized smart contracts rather than a central bank or reserve.

To generate CJPY, users must maintain a Minimum Collateral Ratio (MCR) of 130%. This means the value of the deposited ETH must always be at least 130% of the borrowed CJPY value. A unique feature of the Yamato Protocol is that it does not charge ongoing interest rates or stability fees. Instead, users pay a one-time issuance fee, typically ranging between 0.5% and 2%, when they first generate their CJPY. This model provides cost predictability for users looking for long-term decentralized Yen exposure without compounding debt.

Yamato Protocol utilizes a "subrogation" system instead of traditional forced sales with heavy penalties. If a user's collateral ratio drops below the 130% threshold, their position becomes eligible for subrogation, meaning another user can take over the debt and the associated collateral. Unlike many other DeFi platforms that charge significant liquidation penalties to the original owner, this process allows for the debt to be covered without an additional penalty fee, protecting the protocol's solvency while offering a more user-friendly approach to managing under-collateralized positions.

CJPY is a crypto-backed, decentralized stablecoin, distinguishing it from fiat-backed tokens that rely on yen held in traditional bank accounts. While fiat-backed alternatives are managed by central entities and subject to traditional financial custody, CJPY is non-custodial and operates entirely through on-chain smart contracts. This provides transparency and reduces reliance on centralized financial institutions. Users can typically find liquidity for CJPY on various platforms, including LBank and major decentralized exchanges, often paired with ETH or other stable assets.

The Yamato Protocol has undergone security audits by Block Apex to identify and mitigate potential vulnerabilities. However, users should remain aware of standard DeFi risks, such as smart contract bugs and collateral volatility. A sudden and massive decline in the price of ETH could lead to liquidations if the system's stability mechanisms cannot keep pace. Additionally, the protocol depends on price oracles to accurately determine asset values. To manage these risks, users are encouraged to monitor their collateral ratios and stay engaged with the community via official channels.