Drops lowers the opportunity cost to hold governance tokens or NFT liquidity tokens. They can be used as collateral to earn large returns and rewards on short-term loans. Any supported NFT can be used as collateral to obtain up to 80% of your asset’s value, which is determined using the floor price. Drops lending pool also offers an instant permissionless loan. The protocol’s borrowing function carries a liquidation risk. To avoid liquidation, users are given clear information about the limits and collateral ratios that must be met.
You can use your NFTs to get loans
Drops allows individuals to use NFTs to secure a loan and get instant access without needing to speak to the lender. You can also wait for approval through the NFT Lending Pools. Drops Loans interaction requires no additional fees other than the transaction fees charged by the network for which you are using.
Make your idle assets into active yield
Drops can help you get more out of your portfolio by providing stable coins and governance tokens to NFT lending pools or fungible. In return for attractive rewards & returns, Users can also make money even if their collection is not displayed and increase their cash flow by taking out instant loans.
How do NFT loans work?
You can create or join lending pools.
You can earn attractive returns on your NFT and cryptocurrency assets by lending.
Borrow: Any supported NFT can be used as collateral to obtain up to 80% of your asset’s value. However, the floor price will determine the amount. You can also get an instant loan permissionless from Drops.
Drops DAO and Its Key Features
Drops DAO, a trustless liquidity platform, allows users to access loans, leverage, utility, and NFT tokens. This protocol is built around Drops Loans protocol. It’s a permissionless liquidity protocol that uses the Compound smart contract and is designed for NFT assets as well as DeFi tokens. It has the added benefit that anyone who holds DeFi and NFT tokens can use DropsDAO to gain additional utility and returns on these assets. This reduces the opportunity cost of holding them.
Permissionless lending pools
Drops Loans is whitelisted for major assets that are suitable for native lending or borrowing markets. Tokens with liquidity on Uniswap and Sushi will allow users to create a lending pool that will be assigned to specific lending pools.
Governance and DOP Token
The future direction of Drops will be governed by DOP. They govern the Loans protocol and determine the price ranges of NFTs that can be accepted for Margin NFTs. The protocol is complex so the voting on-chain splits into DOP and voting DOP (veDOP). Vote-boosting can be done by users locking their DOP to veDOP. As liquidity incentives, 2,420,000 DOP tokens (16.1% total supply) will be distributed across asset markets. You can also claim your DOP accrued by clicking the “Claim DOP” button in the pop up window and then signing the transaction.
You can also choose not to allow an asset to be used for collateral. Simply locate the asset in the “Supply” column and switch the collateral switch to the “off” position. To submit the transaction, click ‘Exit Market” in the popup window. Drops is a NFT company that aims to lower the opportunity cost of NFTs and access liquidity without having to sell. Metaverse items, collectibles and financial NFTs are just a few of the NFT segments Drops is targeting.