NFts are facing a massive challenge. Due to their issuance on the blockchain, every time an NFT is minted, bid on, or transferred; an ERC-20 transaction is made. Those transactions can easily cost more than the NFT itself with prices as high as $100 depending on the congestion of the Ethereum blockchain.
Platforms such as Rarible, OpenSea or SuperRare all use the original Ethereum blockchain to process transactions and as long as Ethereum 2.0 isn’t ready, the gas costs will continue to hamper development of the NFT market.
Drops is an upcoming NFT platform which promises to fix these issues and more. First, Drops is built on top of Polygon (formerly MATIC), an Ethereum Layer 2 solution. The goal of this layer 2 solution is to bundle transactions together and split the fees between all the layer 2 transactions, reducing the gas fees to a few cents at most.
Layer 2, while not as secure as Layer 1, is still a decentralized blockchain that has proved to be very solid, facing no major hacks or problems. Its attachment to the Ethereum blockchain mean that patrons and artists are still represented on the most heavily used blockchain while profiting from smaller fees.
Additionaly, Drops has taken measures against other problems that have plagued the NFT industry. First, on most NFT platforms bots have been purchasing potentially valuable items as soon as they’re released, front-running any humans interested by the art and reselling this art for a profit.
Second, talented artists tend to have trouble showcasing their art and getting a jump-start for their digital careers. Often, influencers in the crypto-space decide between themselves whose art is worthy and make sure to front-run the rest of the interested art collectors.
Drops has managed to build a marketplace capable of circumventing these issues through the following measures:
- Zero gas fees. Any small gas fee will be 100% subsidized by the platform.
- Special exposure for new talent through a special selection process.
- Owners of NFTs will earn yield on their assets.
Finally, the platform will offer raffles, NFT drops and NFT loans to their users, something that is non-existent in any of its competitors.
Drops also offers several unique features which set it apart from other NFT marketplaces. One of the most exciting is the convergence between DeFi and NFT through the possibility of NFT-based loans. This is quite an elegant system that allows users to lend or borrow against their art based on the value of their NFTs.
Much like a platform like Compound allows users to borrow against their crypto, Drops will allow users to lock their NFTs in exchange for crypto which, when reimbursed, will unlock the underlying NFT.
Another classic feature of decentralized finance that will be brought to Drops is the ability for users to stake their NFTs in a vault to earn a token that essentially serves as a coupon for future purchases on the platform, encouraging users to continue using the platform and rewarding those that do.
Finally, Drops will organize special launchpad events which should prove very exciting for both new artists and the community. The way these will function is simple: particularly talented new artists curated by the Drops team will benefit from a special promotion system called Launchpad which will bring their work more visibility on the platform. Launchpad will also distribute some of their artwork via raffles to the community.
All of these features are extremely innovative and exciting and should help set Drops apart from its competition as it is already positioning itself as the leading NFT marketplace on layer 2.