Update to the Drops NFT Lending Pool Listing Process
We’ve always been fully committed to bringing the very best to our community, and things just keep getting better at Drops.
DAO governance is the cornerstone of our platform and has been the driving force for listing new NFT lending pools, letting veDOP holders take the reigns and have a say through voting. As this process has evolved, we’ve decided to make some adjustments and refinements.
To that end, we have some exciting updates to share about changes to our NFT lending pool listing process.
With the current model, all NFT collections each have their own lending pool (with the exception of the Yuga Labs pool). While this structure allows each lending pool to stand on its own, the issue is that there’s less liquidity across the board given the fact that they’re siloed.
This is why Drops DAO is proposing a modification to the structure. Moving forward, we’ll now be grouping and classifying NFTs based on their liquidity and through a points-based system.
The new pool categories will be divided as follows:
- Ocean Pool: Blue-chip NFT collections (renaming of Yuga Labs pool)
- Sea Pool: Medium-cap NFT collections (renaming of Moonbirds pool)
- Lake Pool: Low-cap NFT collections (renaming of CyberBrokers pool)
- Pond Pools: Isolated pools for NFT collections
The blue-chip collections signify those with the lowest risk, as they’re the most well-known with the deepest liquidity. Mid and low-cap collections, on the other hand, tend to be riskier and are therefore grouped together.
Not only does this concentrate the available NFT lending pools on Drops but it also helps merge and increase liquidity across the pools, as opposed to having collections siloed within their own pool.
In addition, this new process will help simplify available Drops lending pool products for both new and existing users.
Overall, we believe these changes will allow our ecosystem to flourish and make transactions more seamless across the board.
Pool Criteria & Risk Framework
To establish the fundamental criteria to appropriately group these pools, we’ve created a risk framework ( seen below). In order to determine which pool a specific NFT collection will be grouped into, we’ve created a points-based system of 4 (highest) to 1 (lowest) based on risk.
Each column has 4 different criteria, where points are awarded from the highest to lowest values (4 for the top, 3 for the next, 2 for the next, and 1 for the bottom column).
For example, if an NFT collection received an “Excellent” for Community but only “Great” for Team & Backing, it would receive 4 and 3 points, respectively.
Bonus points can be assigned with the involvement of ambassadors from the community.
Once the total number of points are calculated, we group the corresponding NFT collection into the respective pool based on the sum of those points.
Collections can be added to a single isolated pool if preferred as an alternative option.
veDOP holders will still be able to benefit from and participate in the governance process when it comes to influencing NFT lending pools that will be listed on our platform.
The only difference will be that, moving forward, when a vote to list a particular NFT lending pool has passed, the pool will be distributed into its respective category based on the collection’s liquidity parameters.
Things are about to get more exciting here at Drops, so get ready to rumble!
About Drops DAO
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.