The blockchain has created an environment of decentralized finance, which could well challenge the traditional money markets. Decentralized finance comes with many advantages, not least the investing opportunities it brings to its users, often unparalleled in the conventional markets.
Nowadays, DeFi isn’t just for investing, you can also get mortgages and loans without ever having to sign a document or meet a mortgage broker face-to-face, in a permissionless format. Vaults and liquidity pools on various platforms like Yearn Finance, give investors the chance to stake their idle crypto assets in return for yield that is unparalleled in the centralized marketplace.
Drops, which currently has a total value locked in of over $2.5 million, allows users to put literally any asset to work harder, in order to create a lending pool, which can be used to get a loan and to generate extra income. These pools are composed of collateralized assets, covering the spectrum from gaming NFTs, metaverse gaming items, financial NFTs and DeFi tokens. The goal of this is to bring extra value to their NFTs by reducing the opportunity costs of holding NFTs or giving users the ability to access liquidity without selling their collectibles.
How to put your NFTs to work
According to Drops, borrowing against DeFi And NFT Tokens allows users to earn sizable returns and rewards on short-term loans. Users can put down their NFTs as collateral while receiving access to a trustless loan.
A Drops spokesperson told us, “Idle assets are lost opportunities. With Drops, you can get more from your portfolio by supplying stable coins & governance tokens to fungible or NFT lending pools in exchange for attractive returns & rewards.”
So here’s how you use your NFTs to make some money, potentially enough to pay off your mortgage:
- Visit the Drops website and click on the Connect Wallet button.
- Scan the QR barcode.
- Create your own liquidity pool with the asset of your choice.
The Bottom Line
Currently you can get mortgages for around 3.5% interest rate, with many yielding and loan platforms based on the blockchain you can take advantage of yields of around 6% or even greater. It might sound like a wild idea, but perhaps using the blockchain is the most efficient way to pay off your mortgage?
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.