DeFi and NFT asset owners who are seeking methods to utilize their idle assets to generate sizable returns without being required to sell crypto holdings, might be able to utilize their crypto assets as a form of collateral.
Investors might be able to utilize their crypto assets to take advantage of strategic arbitrage opportunities, purchase a variety of assets with considerable upside potential, while avoiding margin calls on their collateralized debt positions. It may also add to the growth in terms of price, helping to boost a trader’s net returns.
NFT space expands rapidly, it will need reliable platforms for providing affordable loans for non-fungible tokens and other DeFi assets. Investors must have legitimate ways to get more leverage out of their existing crypto for loans & attractive yield farming opportunities.
Leveraging Assets to Generate Passive Returns
An innovative platform known as Drops enables traders or investors to get more returns from their DeFi & NFT assets. As explained on its website, Drops has been designed to put your NFT & DeFi portfolio to work by leveraging the Drops platform to take assets or capital or start generating competitive returns by borrowing funds from other users.
With Drops, users may lend against their DeFi and NFT tokens. This approach helps lower the opportunity cost of holding liquidity or governance tokens by putting them up as collateral and generating substantial returns and rewards on short-term loans.
You may also use your NFTs for loans. Example, you can put your NFTs down as a type of collateral and get quick instant access to a “trustless” loan. The funding can be acquired without having to actually talk to the lender or wait for an approval process because of their “permissionless” NFT Lending Pools.
Drops also allow investors to turn their idle assets into “active” yield. Idle or parked assets may be considered lost opportunities. But with Drops, traders are able to get more from their investment portfolio by supplying various stablecoins & governance tokens to fungible or NFT lending pools in return for significant returns and special rewards.
Going on to explain how NFT loans work, the Drops team notes that users have the choice to either create or join existing pools. When you join these lending pools that meet your particular requirements/goals and terms, or you establish one by selecting which NFTs you want to accept and the amounts that may be lent against them.
The team, Drops, also notes that you may earn sizable returns on your crypto-assets and NFT assets by selecting a LP that meets your requirements and by supplying liquidity.
Borrowing Up to 80% of Total Asset Value
As noted on Drops’ official website, you may use any supported NFT as a form of collateral to lend as much as 80% of the total value of your asset (calculated based on the floor price) & acquire an instant “permissionless” loan via the Drops lending pool.
Drops have been launched to make it hassle-free to use popular NFTs to lend and earn profits. With financial NFTs expected to become the industry leader or follower in the cryptocurrency and blockchain industry, the Drops aims to make it easy to “capitalize on the trend by supporting a rapidly-growing list of tokens.”
Whether you’re interested in making profits on the liquidity of futures insurance, positions, real-world assets, or bonds, Drops may be able to assist you.
You may also turn your interest in gaming into “real” loans & returns by lending utilizing your gaming NFTs. Drops list includes some of the tokens that are widely used like rare items, gaming platform utility tokens, digital real estate and in-game tokens.
If you are a digital item collector, Drops may offer an opportunity to turn your idle assets into active income, and make profits when your cluster is not on display, & enhance your cash flow with quick loans.
Working with Diverse Crypto Ecosystem Participants
Drops investors include AU21 Capital, AXIA8 Ventures, Bitscale Capital, Blocksync Ventures, D64, Drops Ventures, Genblock Capital, x21, Gaga Ventures, Andrew Balyasnikov (Product at Zerion), Pavel Brek (Designer at Zerion), Michael Gu (CEO at Boxmining), Josephy Delong (CTO at Sushi), Richard Ma (CEO at Quanstamp), Nick Sawinyh (CEO at Defiprime and DexGuru), Cooper Turley (Audius), and Marc Weinstein (Mechanism Capital).
Drops’ partners include Polygon (previously Matic Network), Enjin, Quantstamp, Blockchain Game Alliance, Oxb1, Polkastarter, parsiq, Oraichain, Charged Particles, and Solv Protocol.