Drops today unveiled its NFT lending platform starting with a testnet as its first phase followed by the eventual launch of a mainnet. Drops NFT lending platform is set to provide liquidity within the NFT markets by allowing NFT holders to use their metaverse collections as collateral for loans.
Drops is counting on the rising popularity of NFTs to grow its ecosystem by providing NFT owners with much-needed liquidity within this new asset class. The NFT lending platform launched by Drops gives NFT holders an avenue to collateralize their idle NFTs. The platform acts as a liquid market that allows users to earn extra yield and secure loans.
NFTs have become the centre stage of crypto discussions in the past few months. However, the latest crypto market crash revealed underlying liquidity issues in this upcoming niche. The Drops NFT lending model is designed to introduce liquidity in NFT markets by bridging the metaverse world with Decentralized Finance (DeFi).In doing so, we believe that NFT owners can derive more value from their idle assets.”
Drops Founder & CEO Darius Kozlovskis.
Drops plans to roll out the platform in three phases starting with the testnet, which shall be audited before the release of the mainnet. The audit phase is crucial to root out bugs in the system. NFT owners who want to participate should fill an application form, after which they will receive instructions on how to join the Drops NFT Loans testnet.
Drops native tokens dNFT and dTokens will be used to represent the NFT submitted as collateral by users to the platform’s permissionless pools. NFT owners will be allowed to borrow loans from the market after supplying their digital assets to one of the platform’s pools. The owners can use the native tokens to borrow and repay outstanding debts.
The collateral factor within each market will range from 0 to 1 representing the percentage value of the underlying asset that can be borrowed.
The Drops lending platform currently has a total locked value (TVL) of $6.2 million. The above figure will likely increase as more NFT holders join the Drops community.
We are excited about the future of the metaverse given its potential in building global digital communities. The Drops NFT lending platform provides a perfect starting point to contribute towards the growth of the metaverse. In future, we anticipate integrating more DeFi opportunities to support the mainstream adoption of NFTs and digital ecosystems.”