The mainnet launch opens up the crypto ecosystem to instant decentralized loans using non-fungible tokens (NFTs), JPEG and metaverse assets as collateral.
Drops DAO, a decentralized lending platform, is celebrating the launch of its mainnet, unlocking its ecosystem for users to borrow loans and interact with everything the ecosystem has to offer. Announced Wednesday, the transition to the mainnet will provide users with collateralized loans for NFTs, DeFi assets, and metaverse collections.
The launch of the mainnet allows users to lock their assets as collateral, providing the NFT and DeFi ecosystems with additional liquidity and utility. Now, users can easily use their idle NFT, metaverse and DeFi assets as collateral to borrow instant loans through its lending tools. This means users can access capital without relying on centralized entities, enhancing the growth and boosting adoption rates for DeFi and NFT projects.
Drops DAO was founded back in early 2021, a time that had seen the NFT and metaverse conversation reach fever pitch. Nonetheless, the idea of using these assets as collateral to borrow loans seemed “unrealistic” to Drops founder, Darius Kozlovskis.
“But after major shifts in the market and a tireless year of research and development, we finally arrived at what can become a new financial primitive for NFTs,” Kozlovskis stated. “We’re at the dawn of metaverse finance and are truly excited to be part of it.”
The project has since raised $1 million in seed capital funding to develop NFT-collateralized loans from top investors in the crypto space. Investors include Axia8 Ventures, Bitscale Capital, and AU21. Furthermore, the project is supported by numerous angel investors, including Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, and Cooper Turley.
As alluded to, Drops DAO provides decentralized loans for NFT, metaverse, and DeFi assets by leveraging its lending pools. These lending 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 up to a 60% collateral ratio and a highly scalable network. The collateral ratio is due to an isolated pools system, whereby whitelisted NFT collections are accepted as collateral, with multiple tokens available to borrow or supplied as collateral.
On the other hand, the platform also protects lenders and rewards them highly for providing loans. Riskier collections, or non-whitelisted NFT collections, offer higher utilization and in turn higher interest rates for the lender. Lastly, it enables any NFT collection to gain broader utility and liquidity through these lending pools, alleviating sell pressure on secondary markets.
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