Mainnet launches allow instant decentralized loans to be made using metaverse assets, non-fungible tokens (NFTs), JPEG or JPEG as collateral.
Drops DAO is a decentralized lending platform that celebrates the launch of the mainnet. This will allow users to access the entire ecosystem and borrow loans. The transition to the mainnet was announced Wednesday and will allow users to access collateralized loans for DeFi assets, NFTs, and metaverse collection.
Users can now lock their assets to provide additional liquidity and utility for the NFT/DeFi ecosystems. Users can now use the mainnet to instantly borrow money through their lending tools by using any of their NFT, Metaverse, and DeFi assets. Users can now access capital directly without the need to rely on central entities. This will increase adoption and growth of NFT and DeFi projects.
Drops DAO was established in 2021. This time saw the metaverse and NFT 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.”
In order to create NFT-collateralized loans, top crypto investors have provided $1 million of seed capital funding. Axia8 Ventures and Bitscale Capital are among the investors. Numerous angel investors are also supporting the project, such as Maxim Blagov of Enjin, NFT whale N0xb1, Joseph Delong, Quantstamp CEO Richard Ma and Marc Weinstein.
Drops NFT-collateralized Loans
Drops DAO, as mentioned, provides loans to NFT and metaverse assets through decentralized lending. These lending pools allow any type of NFT asset to be used as collateral — from NFT collections and metaverse items to financial NFTs.
This platform is unique in that it offers users a high-scalable network and up to 60% collateral ratio. This is because the platform uses an isolated pool system that accepts whitelisted NFT collection as collateral. Multiple tokens can be borrowed or used as collateral.
However, lenders are protected and rewarded for providing loans through the platform. Non-whitelisted NFT collections and those with higher risk collections offer greater utilization, which in turn leads to higher interest rates for lenders. It also allows NFT collections to have greater utility and liquidity, which helps alleviate secondary market pressure.