Drops DAO launches Mainnet to enable borrowing of NFT-backed loans
The launch of the mainnet opens up the crypto ecosystem to instant decentralized lending using non-fungible tokens (NFTs), JPEGs, and metaverse assets as collateral.
DAO drops, a decentralized lending platform, is celebrating the launch of its mainnet, unlocking its ecosystem for users to borrow loans and interact with all that the ecosystem has to offer. Announced on Wednesday, the transition to the mainnet will provide users with secured loans for NFTs, DeFi assets, and metaverse collections.
The mainnet launch allows users to lock up their assets as collateral, providing the NFT and DeFi ecosystems with additional liquidity and utility. Now users can easily use their dormant NFT, Metaverse and DeFi assets as collateral to borrow instant loans through its lending tools. This means that users can access capital without depending on centralized entities, which improves growth and increases adoption rates for DeFi and NFT projects.
Drops DAO was founded in early 2021, a time that had seen the NFT and metaverse conversation reach a fever pitch. Still, the idea of using those assets as collateral to borrow loans seemed “unrealistic” to Drops founder Darius Kozlovskis.
“But after major changes in the market and a tireless year of research and development, we have finally arrived at what may become a new financial primitive for NFTs,” Kozlovskis said. “We’re at the dawn of metaverse finance and we’re really excited to be a part of it.”
The project has since raised $1 million in seed capital funding to develop NFT-backed loans from top investors in the crypto space. Investors include Axia8 Ventures, Bitscale Capital and AU21. Additionally, the project is backed by numerous angel investors, including Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, and Cooper Turley.
Loans guaranteed by NFT Drops
As mentioned, Drops DAO provides decentralized lending for NFT, Metaverse, and DeFi assets by leveraging its lending pools. These loan pools allow any type of NFT asset to be used as collateral – from NFT collections and metaverse items to financial NFTs.
The platform sets itself apart from the competition by providing users with a guaranteed rate of up to 60% and a highly scalable network. The collateral ratio is due to a system of isolated pools, in which whitelisted NFT collections are accepted as collateral, with multiple tokens available to borrow or provided as collateral.
On the other hand, the platform also protects lenders and rewards them heavily for granting loans. Riskier collections, or non-whitelisted NFT collections, offer higher utilization and, therefore, higher interest rates for the lender. Finally, it allows any NFT collection to gain broader utility and liquidity through these loan pools, thereby easing selling pressure in secondary markets.