- Drops will soon launch its NFT lending platform.
- The platform hopes to bridge the liquidity gap in NFT markets.
- Users can begin to earn and loan by collateralizing their NFTs.
Drops announces the upcoming launch of its NFT lending platform. To note, the testnet launch will mark the initial phase of its mainnet launch. This Drops NFT lending ecosystem hopes to bridge the liquidity gap that prevails in NFT markets.
To do so, the platform will allow its participants to use their metaverse items as loan collateral. Drops is quite optimistic about tapping into this growing ecosystem, with NFTs steadily gaining popularity, it seems like a liquidity solution will come in handy.
Thus, the Drops NFT lending platform introduces an approach to collateralize idle NFTs. In turn, this creates a more liquid market wherein users can start earning extra yield and obtain loans.
Drops Founder & CEO Darius Kozlovskis says,
NFTs have become the center 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.
In detail, the platform will roll out in three phases. Leading the charge is the testnet kickoff. Following the testnet is an audit and lastly, the mainnet release. For those NFT owners looking to take part in the Drops NFT Loans testnet, they can submit an application form. After this, they will be guided on how to get started.
In addition, Drops will be leveraging its native tokens dNFT and dTokens in order to represent NFT collaterals coming into the platform’s permissionless pools. Likewise, NFT owners supplying their digital assets to particular pools can use these native tokens to borrow from markets or repay outstanding debts.
Meanwhile, the collateral factor is taken care of by each market having a factor ranging from 0 to 1. This represents the portion of an underlying asset value that could be borrowed. Currently, the Drops lending platform holds $6.2 million in total value locked (TVL). More so, this figure will likely grow as more eager metaverse participants flock to the Drops community.
In conclusion, Kozlovskis says that he is excited about the future of the metaverse. Mostly because of the potential in building global digital communities. The CEO believes that the Drops NFT lending platform will provide a perfect starting point to contribute towards the growth of the metaverse. For the future, he is looking forward to integrating more DeFi opportunities. He says this will support the mainstream adoption of digital ecosystems and NFTs.
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