We’re delighted to announce that the Drops Loans protocol has been deployed on Ethereum mainnet!
You can find it at https://drops.co/loans/
The protocol was created with a focus on being the first widely-adopted platform for trustless borrowing against NFTs and NFT-related assets.
Although the Drops Loans protocol will begin by accepting governance tokens from prominent NFT projects, this is only the first step towards the larger objective. Within the year, we aim to offer permissionless loans against actual NFTs themselves.
What do Drops Loans Look Like at Launch?
As of launch time, Drops Loans has opened markets for Enjin Coin (ENJ), USD Coin (USDC), Wrapped Bitcoin (WBTC) and Ether (ETH). Users will be able to lend and borrow each of these assets at rates determined by the market, with loan-to-value (LTV) ratios ranging between 60% and 80%.
Further markets will be added over time, via Drops governance. For more information on the governance process, please check out our recent blog post here.
The Drops Loans protocol will be secured by Chainlink oracles, to ensure that loans are accurately and reliably priced at all times. As you’ll be aware, Chainlink is the most widely-used and battle-tested oracle solution in blockchain today, already assisting in the management of tens of billions of dollars for leading DeFi projects.
Liquidity Mining Program
To kick-start liquidity for the protocol, Drops will be launching a new liquidity program beginning July 14th. A total of 2,420,000 DOP (16.1% of total supply) tokens over the span of 5 years will be allocated across asset markets as liquidity incentives.
From 14 July to 14 August 2,666 DOP per day will be released.
Liquidity mining rewards will be updated on a regular basis to reflect market conditions. Emission schedules can be also changed through governance voting.
Users providing liquidity to the Drops loans protocol will receive rewards in Drops Ownership Power (DOP) tokens, the native token of the Drops platform. DOP will be used in the governance of Drops loans, as well as a utility token within the wider platform.
Still To Come in 2021
That’s just the tip of the iceberg for Drops Loans! We still have plenty of developments to come within 2021, including the following:
- An automated market-maker (AMM) loans market: This will enable users to borrow against AMM governance tokens such as Uniswap (LP) tokens, Balancer (BPT), Sushi (SLP) and Curve (CRV).
- Expansion to Polygon and Binance Smart Chain: Both of these platforms are Ethereum Virtual Machine (EVM) friendly, making it extremely easy to expand to more platforms. Both Polygon significantly addresses scaling issues, while Binance Smart Chain will open up possibilities to a wider range of assets and collateral types.
Last but not least, Drops Loans will expand to fulfil the most major goal of the platform: To include borrowing against actual non-fungible tokens — the NFTs themselves. This will be made possible through the NFT Lending Pools, for what we believe to be the first gateway to completely trustless lending against NFTs.
This will begin with Uniswap v3 liquidity provider NFTs, providing more utility to Uniswap liquidity providers, as well as NFTs supported by NFT Lending Pools.
Drops provides multi-chain loans for NFT and DeFi assets, supplying them with much-needed utility. Users can leverage their idle DeFi tokens and NFTs to obtain permissionless loans and earn extra yield.