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Wednesday, October 20, 2021

Charged Particles Partners with Drops for DeFi NFT Loans

This post was originally published on Charged particles

Jon Kruzeniski

Jun 2 · 3 min read

Charged Particles is excited to announce a strategic partnership with Drops!

Until recently NFTs have been static in nature; with their true potential unrealized by the market. Enter Drops: a DeFi-style protocol to NFTs that enables users to leverage their NFTs to obtain loans and earn yield; reducing the opportunity cost of holding NFTs long-term.

Instead of having NFTs remain idle; they can be fractionalized to create Margin NFTs that can be used for trustless loans and NFT staking. What was once a static asset is now transformed into a powerful Financial NFT that earns yield and has additional utility.

We’re thrilled to be partnering with folks as passionate about expanding NFT utility and use cases as us, and we look forward to what the future has in store. Partnerships like these are especially important as we move into more financial use-cases for our Charged Particles protocol; as there is no ceiling on the potential of Financial NFTs!

What We’re Doing

The Drops protocol will be integrating support for Charged Particles NFTs, enabling them to be fractionalized and create a Margin NFT product. These Margin NFTs are compatible with the rest of the Drops protocol for:

  1. Trustless loans, borrowing against Margin NFT as a collateral
  2. NFT staking, using the Drops Margin NFT solution to earn yield.

This integration will add extra utility to Charged Particles, allowing holders to access additional funds without having to sell their NFTs. Funds borrowed against Charged Particles can be used to generate a return against the underlying NFT via strategies such as yield-farming, which will eventually be integrated directly into the protocol via Drops Vaults. This integration will go live on both Layer 1 Ethereum and Layer 2 Polygon.

Why We’re Excited

Darius Kazlovskis, Founder of Drops

“Charged Particles NFTs are part of a new asset class of financial NFTs. They bring new use cases for NFTs and how they can be evaluated. We’re excited to integrate them into Drops ecosystem to extend their use!”

Ben Lakoff, Co-Founder of Charged Particles:

“With Charged Particles, ANY NFT can be filled with multiple types of assets. We believe that this offers a near-perfect collateral type for NFTs in general as collateral within the growing convergence of DeFi and NFTs. We’re excited to partner with Drops to unlock this utility for our NFT hodlers!”

About Drops

Drops brings DeFi-style infrastructure to NFTs, adding much-needed utility to idle NFT assets. Users can leverage their NFTs to obtain loans and earn real yield, reducing the opportunity cost of holding NFTs long-term.

This Drops infrastructure will become increasingly important as we witness the rise of “financial” NFTs — an expansion of the space beyond digital artwork into more tangible financial instruments.

Drops will offer gasless transactions and a smooth user interface by leveraging the layer-two platform Polygon, enabling fair and frictionless participation for all users.

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About Charged Particles

Charged Particles is a protocol that allows users to deposit ERC-20 tokens(ANY tokens) into an NFT. A scarce NFT (e.g. Art, Collectible, Virtual Real Estate, In-Game Item, etc.) can now be transformed into a basket holding a number of other tokens. The Principal amount can be time-locked inside the NFT, and through integration with Aave’s aTokens, the programmable yield from these DeFi yield-generating assets is just a few clicks away.

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