The upcoming NFT platform Drops will allow trustless lending by using NFTs as collateral. They will use the NFT20 protocol for pooling NFTs and converting them to ERC20 tokens, while also allowing multiple NFT assets to be staked at the same time.
On the official website the team lists a variety of NFT projects as supported projects. Among those are Meme, EthMen and PolkaPets. Together with their own NodeRunners NFTs they want Drops to become a premier destination for NFT staking, launching and lending.
In the past couple of months we’ve seen platforms like NFT20 and NFTX tapping into similar innovations. Pooling and converting NFT assets into ERC20 tokens is one of the latest trends that combines DeFi with the NFT market. Users can use these ERC20 tokens to redeem an NFT asset from the pool.
Lending money with NFTs
Drops will add to that, as someone can borrow money against the NFT that they own. They would need to send their NFT to the appropriate pool. The protocol then gives them automatically the corresponding amount of tokens. The borrower can get their NFT back by repaying the loan. However, if the loan-to-value drops below a certain threshold, other people can jump in and repay the loan to claim the NFT.
The Drops development team clearly wants to bring more utility to NFTs, as collecting them can be a bit passive. Their upcoming Drops platform allows users to stake their purchased NFTs and earn dPoints, which provide discounts for upcoming NFTs and crypto art drops. In addition they want to create a fair distribution process for crypto art, while also becoming a promotion platform for upcoming talent.
NodeRunners NDR token
Drops is part of the Node Runners ecosystem. As a result they use the NDR token for governance over the platform. NDR holders decide on which NFTs get added to the vault and what their weight will be. In addition NDR will be a payment option within Drops, while token holders also earn share of the Drops platform fees.
Node Runners is an open-source cyberpunk-themed game that combines NFTs and DeFi. The game features hero NFTs like Vitalik Buterin, Satoshi Nakamoto, Andre Cronje and Keanu Titanhand. Collectors can stake these cards and earn NDR tokens.