NFT Loan Company Drops DAO Announces Mainnet Launch
2022.05.04 18:05
NFT Loan Company Drops DAO Announces Mainnet Launch
- Drops DAO has announced its mainnet launch.
- Drops is a DAO that provides loans for NFT and DeFi assets.
- The protocol uses lending pools that enable any type of NFT asset to be used as collateral.
Drops, the DAO providing loans for NFT and DeFi assets, has announced its mainnet launch. Drops DAO is a firm that provides loans for NFT and DeFi assets, supplying them with utility. The protocol uses lending pools that enable any type of NFT asset to be used as collateral.
The mainnet launch came alongside Drops’ successful seed funding round, where it raised $1 million on May 2, 2021. Some of the investors of this venture include Axia8 Ventures, Bitscale Capital, and AU2. Furthermore, the project is reportedly supported by numerous angel investors including Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, and Cooper Turley.
The Drops DAO team believes that access to capital without relying on intermediaries is a crucial development and will bring more mainstream attention to DeFi protocols.
The platform also claims to stand out from other lending solutions because of its highly scalable system and up to 60% collateral ratio due to isolated lending pools.
An isolated lending pool can accept whitelisted NFT collections as collateral, with multiple tokens available to borrow or supply as collateral. Reportedly, a higher collateral ratio is possible due to lower protocol risk and scalability. Lenders take a bet on collection liquidity, with riskier collections offering higher utilization and interest rates.
The team states that 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.
Drops founder Darius Kozlovskis told CoinQuora that back in early 2021, when they started working on Drops, the idea of instant loans against NFTs seemed unrealistic.
Kozlovskis said:
We’re at the dawn of metaverse finance and are truly excited to be part of it.
He added that after major shifts in the market and tireless years of research and development, they finally arrived at what can become a new financial primitive for NFTs.
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