Drops DAO, a decentralized lending network based in Lithuania, has officially announced that its mainnet version will go online on Wednesday, May 4, 2022. The mainnet’s debut gives users and community members access to the Drops ecosystem, allowing them to interact with and use all of the ecosystem’s features.
Drops DAO’s mainnet launch allows users to utilize their non-fungible tokens (NFTs), metaverse assets, and DeFi tokens as collateral to borrow money through the platform’s lending facilities. According to the team’s announcement, this will provide much-needed liquidity and utility to the NFT and DeFi ecosystems. Drops DAO, on the other hand, eliminates the necessity for middlemen in the lending system, highlighting the benefits of decentralized protocols.
Drops founder, Darius Kozlovskis commented on the launch of the mainnet;
“Back in early 2021 when we started working on Drops, the idea of instant loans against NFTs seemed unrealistic. 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. We’re at the dawn of metaverse finance and are truly excited to be part of it.”
Drops DAO allows users and other members of the community to borrow from their lending tools, while lenders give liquidity to liquidity pools in order to earn additional interest. The technology is highly scalable and provides borrowers with up to a 60% collateral ratio. Because of the lower protocol risk and scalability, a higher collateral ratio is available. Isolated lending pools that take whitelisted NFT collections as collateral are also available on the mainnet, with numerous tokens available to borrow or supply as collateral.
Lenders are also adequately compensated based on the risk of NFT collections, metaverse assets, and DeFi tokens held as collateral. Lenders choose those with more risk since they offer better utilization and interest rates. Furthermore, through these lending pools, any NFT collection can obtain greater use and liquidity, relieving sell pressure on secondary markets.
Drops DAO earned a $1 million initial investment round from renowned VCs and angel investors in the crypto world, and the mainnet debut comes after a difficult year of development. Axia8 Ventures, Bitscale Capital, and AU21 were among the investors. Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, and Cooper Turley were among the angel investors that participated in the seed fundraising round.
