Drops DAO is launching its mainnet today providing users with a fully-fledged platform to borrow loans using their non-fungible tokens (NFTs) and decentralized finance (DeFi) assets.
Drops, a decentralized autonomous organization (DAO) providing loans for NFTs and DeFi assets, has launched its mainnet platform. Following months of development and testing, the platform is finally transitioning to its live network, enabling users and community members to utilize their crypto assets and NFTs on the Drops DAO ecosystem.
Announced Wednesday, May 4, the mainnet aims to bring much-needed liquidity to the NFT and DeFi ecosystem while providing utility to these assets. Drops’ users are now able to leverage their assets as collateral through lending tools and acquire instant loans. Adding NFT and DeFi assets as loan collateral removes the need for intermediaries to acquire loans, enhancing capital requirements for investors in DeFi. Additionally, Drops’ mainnet aims to boost the mainstream adoption of NFTs and the DeFi ecosystem.
Speaking on the launch of its mainnet and the utility of decentralized loans, Drops founder Darius Kozlovskis stated,
"When we started working on Drops, the idea of instant loans against NFTs seemed unreailistic. But after major shifts in the market and tireless year of research and developement, we finally arrived at what can become a new financial primitive for NFTs. We’re at the dawn of metaverse finance and are truly excited to be part of it."
Founded in early 2021, Drops DAO aims to expand the horizon of decentralized lending by adding exotic assets such as NFTs in its collateral pool. The platform uses lending pools that enable any type of NFT asset to be used as collateral — from collectibles and metaverse items, to financial NFTs. Users can leverage their idle NFTs and DeFi tokens to obtain loans and earn extra yield.
The platform differentiates itself from other decentralized lending solutions by offering a highly scalable platform and high collateral ratios (up to 60%) on its isolated lending pools. These isolated lending pools allow whitelisted NFT collections (such as BAYC, CryptoKitties, etc.) as collateral to borrow instant loans.
Lenders on the platform take a bet on the collection liquidity, whereby the riskier NFT collections offer higher utilization and interest rates. Any collection can be added to Drops without incurring extra lender risk. Moreover, it enables any NFT collection to gain broader utility and liquidity through these lending pools, alleviating sell pressure on secondary markets.
The launch of the mainnet follows a successful $1 million seed funding round in May last year. The seed funding round welcomed some top VCs and angel investors including Axia8 Ventures, Bitscale Capital, AU21, Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, and Cooper Turley.
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