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In the past many grid-based video coding schemes using image warping p17ediction have been proposed. The advantage of grid-based motion compensation is its ability to model non-translational motion. Disadvantages are the interdependency of motion vectors which require more complex motion estimation strategies and its restricted ability to model motion boundaries. In this paper different solutions, to cope with the latter deficiency are presented and compared with respect to coding efficiency. In particular, three adaptive modes for handling motion discontinuities and a block-adaptive loop filtering are presented. It is shown that these are key components for achieving a high coding gain in grid-based hybrid coding. Introducing these features into a wavelet-based video coder leads to a coding gain of up to 2,5 dB compared to ITU H263 + and MPEG-4.