Drops, an NFT-meets-DeFi platform, launched its loans protocol on Ethereum mainnet yesterday, in its very first step toward NFT-backed loans.
🙌📢The wait is over!
Our Loans protocol with liquidity mining program is live!🥳You can lend/borrow $ENJ, $USDC, $ETH, $WBTC
and mine $DOP here👉https://t.co/YCh56YE5hk🎯More #NFT related tokens are going to be added soon.
đź“’More details: https://t.co/BfJYBd1pwH pic.twitter.com/Xmg5VK74cz
— Drops (@dropsnft) July 14, 2021
Initially, the Compound fork will only support markets for lending and borrowing against NFT governance tokens, but plans to expand to support actual NFT tokens by the end of the year.
The Drops Loans Protocol
Drops Loans has already secured more than half a million in total value locked (TVL) in less than 24 hours since launch, spread across four initial markets. These include Enjin Coin (ENJ), USD Coin (USDC), Ether (ETH) and Wrapped Bitcoin (WBTC), with more NFT governance token markets on the way.
Markets are currently secured using Chainlink oracles.
The launch is also accompanied by a liquidity mining program to incentivize liquidity, which is currently distributing 2,666 Drops Ownership Power (DOP) tokens per day. DOP is Drops’ official token, which is used in governance and other platform functions.
The Road Ahead
The Drops team has already announced some major plans for the remainder of 2021, including an expansion onto both Binance Smart Chain (BSC) and popular Layer-2 scaling network, Polygon.
Along with this, they also plan to implement markets for automated market-maker (AMM) governance tokens, as well as their ultimate goal: borrowing against actual NFT tokens. The latter involves additional components that will work in conjunction with the loans protocol, including a fractionalization protocol and “Margin NFT” – an NFT leverage function.
If the team is successful, Drops may be the very first DeFi protocol to provide trustless loans against non-fungible tokens.Â
About Drops
Drops is a project created by the founders of Node Runners, an NFT-based card game. The platform seeks to provide utility to idle NFT assets, allowing holders to obtain loans and earn yield against them, just as they can with fungible tokens.
The project points out the importance of such infrastructure for the future of NFT assets, particularly “financial NFTs” – more tangible NFT assets that represent financial instruments.
Alejandro is a blockchain writer and consultant who has been involved in the space since early 2016. Being extremely passionate about this emerging technology, he has written content for a myriad of projects and news outlets.