- Drops DAO has announced that it’s now live and will start providing loans for NFTs and DeFi assets with some of the highest collateral ratios.
- Scalability and lower protocol risk enable the project to offer the higher ratios, with its isolated lending pools able to accept whitelisted NFT collections as collateral.
Drops DAO is now live! The project announced the launch of its mainnet today as it promises to change the DeFi and NFT landscape with its innovative lending products.
In its press release, the project claimed that it would bring “much-needed utility and liquidity to NFT and DeFi assets.” Drops DAO allows users to leverage their assets as collateral through its lending pools and get access to instant loans. This peer-to-peer financial model is what the DeFi industry has been built upon, eliminating the middleman to allow for more rapid growth and lower expenses.
While it’s neither the first nor the only project offering this kind of service, Drops DAO sets itself apart through its highly scalable system and its very high collateral ratio, currently going up to 60 percent. It’s able to achieve the latter through isolated lending pools that can accept whitelisted NFT collections as collateral.
In Drops DAO, lenders bet on collection liquidity. Risker NFT collections offer higher utilization and consequently, higher interest rates. Users can add any NFT collection without incurring extra lender risk. While this system enables the project to function seamlessly, it also has a secondary effect in which through giving broader utility to NFTs, it alleviates selling pressure on secondary markets.
Darius Kozlovskis, the Drops DAO founder commented:
Back in early 2021 when we started working on Drops, the idea of instant loans against NFTs seemed unrealistic. But after major shifts in the market and tireless years of research and development, 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.
Drops has already attracted some major backers, with its $1 million funding round seeing the participation of Axia8 Ventures (Animoca Brands, PARSIQ, Injective Protocol), AU21 (Polygon, Polkadot, Elrond) and Bitscale Capital (Fantom, Lido, FTX) as well as individuals such as Enjin CEO Maxim Blagov and Quanstamp CEO Richard Ma.