Lending Company NFT Drops DAO Announces Mainnet Launch
- Drops DAO has announced the launch of its mainnet.
- Drops is a DAO that provides loans for NFT and DeFi assets.
- The protocol uses loan pools that allow 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 company that provides loans for NFT and DeFi assets, providing them with utility. The protocol uses loan pools that allow any type of NFT asset to be used as collateral.
The launch of the mainnet was accompanied by the successful seed funding round of Drops, where it raised $1 million on May 2, 2021. Some of the investors in this venture include Axia8 Ventures, Bitscale Capital, and AU2. Additionally, the project is reportedly backed by numerous angel investors including Enjin CEO Maxim Blagov, NFT 0xb1 whale Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein and Cooper Turley.
The Drops DAO team believes that access to capital without the need for 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 due to its highly scalable system and up to 60% collateral rate through isolated lending pools.
An isolated lending pool can accept whitelisted NFT collections as collateral, with multiple tokens available to borrow or pledge as collateral. Apparently a higher collateral ratio is possible due to lower protocol risk and scalability. Lenders are betting on the liquidity of collections, with riskier collections offering higher usage and interest rates.
The team states that any collection can be added to Drops without incurring additional risk to the lender. Additionally, it allows any NFT collection to gain broader utility and liquidity through these loan pools, thereby easing selling pressure in the secondary markets.
Drops founder Darius Kozlovskis told CoinQuora that in early 2021 when they started working on Drops, the idea of instant loans against NFTs seemed unrealistic.
We’re at the dawn of metaverse finance and we’re really excited to be a part of it.
He added that after major changes in the market and tireless years of research and development, they have finally arrived at what may become a new financial primitive for NFTs.