Tutorial: How to Use Drops Loans
Before you begin, you’ll need to ensure that you have a web 3.0 wallet such as Metamask, loaded with some Ether (ETH) to pay for transaction fees.
- To get started, visit https://drops.co/loans/, or simply click on the “Launch App” button on the Drops.co homepage.
- Click the “Connect wallet” button in the top-right corner to connect your wallet to the dApp.
- Once connected, you’ll be able to view all assets compatible with the protocol. From here, you can lend your assets, as well as borrow against them.
- Select the asset that you wish to supply to the protocol by clicking on it in the “Supply” column on the left.
- A window will appear, requesting access to the token selected. Approve the asset for use by the protocol, by clicking the “Enable” button and approving the transaction.
- Enter the quantity of tokens you wish to supply to the protocol, then press the “supply” button. Approve the transaction in your wallet.
- Give the transaction some time to confirm. Once it is complete, your supplied assets will be shown clearly in the “Supply” section of the dashboard.
To borrow an asset, you will need to enable one of your supplied assets for use as collateral to borrow against.
- To enable an asset for use as collateral (to borrow against it), click on the switch in the “Collateral” column. Confirm this by clicking the “Enter Market” button in the pop-up window. Confirm the transaction in your wallet.
- Now, you’re ready to borrow against this collateral. Click on the asset that you wish to borrow in the “Borrow” column on the right, then enter the quantity that you wish to borrow. Click the “Borrow” button in the pop-up window and confirm the transaction.
- Once the transaction is confirmed, you can view your loan position in the dashboard. This displays the total value of your loan positions, the quantity of the token borrowed and the estimated rate of return.
Once you’re done using your borrowed funds, you must repay them via the protocol.
- To do this, click on the asset you wish to repay from the “Borrow” column and make sure that you select the “Repay” tab. You may need to enable the asset before using it with the protocol.
- Enter the amount of the asset that you wish to repay, and then click the “Repay” button. Confirm the transaction in your wallet.
- And that’s it! You’ve successfully repaid your first Drops Loan.
- You can double-check that you’ve repaid the whole loan by making sure the figure next to the “Borrow” header displays “$0”. The blue slider in the top panel should also show “0.00%”.
Yield on Drops Loans currently comes from two sources:
- 1.Native yield: The rate of return paid by protocol users borrowing tokens. This yield is distributed in the same tokens that you lent to the protocol, every block.
- 2.Liquidity mining rewards: Liquidity mining rewards are also being distributed by the protocol for a set period of time. This yield is paid in Drops Ownership Power (DOP), the native token of the Drops platform.
Native yield is added directly to the respective asset’s pool. You can withdraw your growing share of the pool at any time, simply by withdrawing the asset from the protocol.
- To withdraw your native yield (and/or principal deposit), click on the asset in the “Supply” column.
- In the pop-up window, click on the “Withdraw” tab. Enter the amount that you wish to withdraw, then click the “Withdraw” button and confirm the transaction.
- Accrued liquidity mining rewards can be viewed in real-time by clicking on the wallet information button in the top-right corner of the dApp (circled in red below).
- A pop-up window will appear, displaying your accrued DOP rewards, as well as your wallet’s DOP balance and the current DOP price.
- To claim your accrued DOP, click on the “Claim X DOP” button and sign the transaction.
Last modified 1yr ago