NFTs are changing the face of digital asset management. On that note, Drops created a game-changing solution for holding NFTs while earning yields.
The Drops platform serves as a launchpad for emerging digital creators.
Decentralized finance (DeFi), non-fungible tokens (NFTs), and the metaverse are currently the three most talked about applications based on blockchain technology. NFTs were considered as mere arts stored in an asset but with more innovations springing up, NFTs are evolving with additional use cases that add value, including lending/borrowing and acting as collateral. Thus, firms like Drops seek to show how NFTs can be utilized to contribute to the growth of decentralized finance in the long run.
To that end, Drops came with permissionless lending pools where NFT holders can obtain an instant loan, manage the length of the lending period as well, just like Ether on Aave. To enable actual yield farming using NFTs, Drops allows holders to create NFT vaults where funds borrowed against NFTs are sent to a yield farming strategy. By depositing into the vault, users can earn dPoint tokens which are considered as ‘coupons’ that can also be used to get cashback in DROP tokens.
To note, loan markets for fungible tokens based on NFT-related tokens and DeFi assets are already in existence with Aave and Compound championing the protocol. However, Drops is here to bring its own innovations and projects aligning with its roadmap. As a result, Drops is dedicated to listing NFT-related projects, offering an appealing liquidity mining program. Alongside, it is launching on multiple chains.
Drops Explained
Drops is a leading platform that provides loans for NFT and DeFi assets, thereby supplying them with a much needed utility on its native governance token — Drops Ownership Power (DOP) which is IDO’ed on Polkastarter. To attract more users to the platform, Drops enables any kind of asset to be used as collateral, such as metaverse items, DeFi tokens, financial NFTs, and NFT collectibles to mention a few.
Going back, the team first got the attention of the crypto community with the launch of the NFT game project — Node Runners, in October 2020, which then birthed Drops. Afterward, Node Runner released a new $DROP utility token with the $NDR token acting as the governance token.
Ever since they have gone ahead to launch fungible loans mainnet and an NFT loans testnet. Moreover, with a Total Value Locked (TVL) being 2.5 million, the brand has made a mark in the industry and by far, gained the trust of top blockchain organizations. The wait is over! Our Loans protocol with liquidity mining program is live! You can lend/borrow $ENJ, $USDC, $ETH, $WBTC and mine $DOP herehttps://t.co/YCh56YE5hk More #NFT related tokens are going to be added soon. More details: https://t.co/BfJYBd1pwH pic.twitter.com/Xmg5VK74cz — Drops DAO (@dropsnft) July 14, 2021 Remarkably, the CEO of Enjin, Maxim Blagov, Charged particles, Polkastarter, Solv Protocol, Oraichain, and Parsiq are some of the key partners who have journeyed with Drops. More so, Drops is listed on Uniswap and Gate.io at the moment.
Not only that, Drops integrated Chainlink Price Feeds on its Ethereum mainnet to ensure that loans are accurately and securely priced against various stablecoins and cryptocurrencies. Similarly, Drops partnered with Enjin to enable staking and borrowing by Drops users against Enjin-powered NFTs and in-game assets.
Unique Features of Drops
Borrow Against DeFi And NFT Tokens
Drops reduces the opportunity cost of holding governance or liquidity tokens by supplying them as collateral and earning sizable returns & rewards on short-term loans. Users can use any supported NFT as collateral to borrow up to 80% of the value of your asset which is determined by the floor price. In the same vein, receive an instant permissionless loan from the Drops lending pool.
To clarify, there is a liquidation risk associated with using the borrowing function in the protocol. Users are clearly communicated collateral ratios and limits, which will need to be adhered to in order to avoid liquidation of the collateral.
Use Your NFTs For Loans
In the Drops ecosystem, individuals can use NFTs as collateral and receive instant access to a trustless loan without having to talk to the lender. Or wait to be approved as a result of the permissionless NFT Lending Pools.
To use the Drops Loans protocol, approve and deposit a supported asset through the official Drops Loans GUI at https://drops.co/loans/.
Nevertheless, interacting with the Drops Loans protocol requires nothing aside from blockchain transaction fees for the network you are using.
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