Drops DAO launches Mainnet to bring much-needed utility and liquidity to NFT and DeFi assets

Decentralized finance (DeFi) has been gaining a lot of momentum since the idea was first born in August 2018. As an ecosystem of financial applications being built with blockchain technology, DeFi aims to democratize finance by replacing legacy and centralized banking and financial institutions with peer-to-peer relationships.

The goal is to facilitate transactions between individuals without the involvement of banks, governments, and financial institutions. In addition, DeFi has also gained traction in borrowing and lending as investors and users bypass the centralized traditional banks to trade directly with one another.

The popularity of NFTs has also accelerated the demand for DeFi-based loans. That’s why Vilnius, Lithuania-based fintech startup Drops DAO is on a mission to meet the borrowing needs of millions of users by providing loans for NFT and DeFi assets.

Today, Drops DAO announced the launch of its mainnet launch, transitioning to a live network that enables users and community members to interact with everything the Drops DAO ecosystem provides.

The launch will also enable Drops DAO to bring much-needed utility and liquidity to NFT and DeFi assets. Users can leverage their assets as collateral through its lending tools and acquire instant loans. Having access to capital without relying on intermediaries is a crucial development and will bring more mainstream attention to DeFi protocols.

Unlike other solutions, Drops DAO provides a highly scalable system and up to a 60% collateral ratio due to isolated lending pools. An isolated lending pool can accept whitelisted NFT collections as collateral, with multiple tokens available to borrow or supplied as collateral.

A higher collateral ratio is possible due to lower protocol risk and scalability. Lenders take a bet on collection liquidity, with riskier collections offering higher utilization and interest rates. Any collection can be added to Drops without incurring extra lender risk. Moreover, it enables any NFT collection to gain broader utility and liquidity through these lending pools, alleviating sell pressure on secondary markets.

Commenting on the launch, Drops founder Darius Kozlovskis said in a statement, “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 tireless years 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 raised $1 million in seed funding on May 2-21. Investors include Axia8 Ventures, Bitscale Capital, and AU21, Furthermore, the project is supported by numerous angel investors, including Enjin CEO Maxim Blagov, NFT whale 0xb1, Joseph Delong, Quantstamp CEO Richard Ma, Marc Weinstein, Cooper Turley.

Founded in 2021, Drops DAO provides loans for NFT and DeFi assets, supplying them with much-needed utility. The protocol uses lending pools that enable any type of NFT asset to be used as collateral — from collectibles and metaverse items to financial NFTs. Users can leverage their idle NFTs and DeFi tokens to obtain loans and earn extra yield.