Drops looking to bring NFTs into DeFi
Drops is one of the latest protocols to bring NFT assets into the DeFi space. Through the platform users can fractionalize NFTs and then take out a loan by locking their digital assets. To make this happen, they are introducing Margin NFTs.
The idea behind Drops is actually quite simple: the platform gives users a way to extract additional value from their NFTs, which would otherwise remain idle in their wallets. The platform combines NFTs with DeFi, and combines NFT fractionalisation, trustless loans and liquidity-pool tokens.
The recently introduced Margin NFT is key to these new features. Users can make any NFT available to the platform, which then determines whether the value is more than $100. If it is, users will receive Margin NFT. This new type of token can then be used across different DeFi products. Users can then for example stake their Margin NFT tokens and earn fees from the dNFT protocol. In addition they can take out a loan in ETH, a stablecoin, the DROPS token or the NDR token.
Not all features are live yet. According to their roadmap they will introduce trustless NFT loans next month. In August followed by the NFT Vaults that will allow yield farming using NFTs. With everything they do, the Drops platform wants to provide financial options for NFT owners, without they need to sell the NFTs.
The talk of town right now for Drops is their DOP governance token. On Friday May 21st they will have an Initial DEX Offering (IDO) on Polkastarter, which allows investors to acquire tokens before they hit the market. The DOP token will also be listed on Uniswap later this day.
Owners of the DOP token get to participate in the on-chain and off-chain voting process for the platform. This means that users get a say in DOP emissions on the platform, new token markets and collateralization ratios.
There’s also a second level of governance, where users need to lock (or stake) their DOP tokens. The longer they do this, the more veDOP (voting-escrow DOP) they earn. These veDOP tokens boost the mining APY and collect pool emission and protocol fees.
In total there’s 15,000,000 DOP tokens of which 50.63% goes to the community through liquidity mining. The rest goes to investors, advisors, the team, a reserve pool for business development, the Node Runners DAO and bootstrapping liquidity on decentralized exchanges.