# DROP vs TIN - Differences **URL:** \ **Category:** Product\ **Created:** [January 11, 2021, 1:03pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794 "2021-01-11T13:03:41Z")\ **Posts on this page:** 13\ **Page:** 1
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 11, 2021, 1:03pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/1 "2021-01-11T13:03:41Z")
![Drop vs Tin (1)](https://europe1.discourse-cdn.com/flex013/uploads/centrifuge1/original/1X/3382c18f581cf8a36f78cf8fe60042439e2f3e19.jpeg) ![Drop vs Tin (2)](https://europe1.discourse-cdn.com/flex013/uploads/centrifuge1/original/1X/988c2cc53f7c9d93cfc17fdb2b294e7c699cd579.jpeg) Hello, I think this gives a good overview of the big differences between DROP and TIN. Therefore, I think it’s best to invest early in the pool to get the DROP tokens if you want to lower your risk. What do you think? Or am I missing something? I have been researching about Centrifuge, Tinlake, Radial and then DROP and TIN. And I took 2 screenshots from a video uploaded by Chico Crypto. Another interesting article can be found here: [https://developer.centrifuge.io/tinlake/overview/tranches/](https://developer.centrifuge.io/tinlake/overview/tranches/) I hope this is useful for some of you and wish you the best! Regards, ---
**Author:** ![Ivor](https://avatars.discourse-cdn.com/v4/letter/i/ccd318/32.png) [@Ivor](https://gov.centrifuge.io/u/Ivor)\ **Post date:** [January 11, 2021, 2:04pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/2 "2021-01-11T14:04:55Z")
This graph helped me alot. Thank you for sharing. The way I view this is DROP are bonds(lower risk, lower yield) and TIN are stocks(higher risk, higher yield) ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 11, 2021, 6:26pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/3 "2021-01-11T18:26:50Z")
Thank you. Glad it helps. I like your comparison! ---
**Author:** ![aldawg77](https://avatars.discourse-cdn.com/v4/letter/a/cdc98d/32.png) [@aldawg77](https://gov.centrifuge.io/u/aldawg77)\ **Post date:** [January 11, 2021, 8:35pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/4 "2021-01-11T20:35:59Z")
Thanks for this useful info ---
**Author:** ![CryptoCap](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/cryptocap/32/277_2.png) [@CryptoCap](https://gov.centrifuge.io/u/CryptoCap)\ **Post date:** [January 11, 2021, 10:11pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/5 "2021-01-11T22:11:39Z")
That definitely clears it up for me thxs!! ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 13, 2021, 10:56am UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/6 "2021-01-13T10:56:35Z")
Hi, For those of you who want to watch Chico’s video, here is the link: [1000x Moonshot Altcoins! Still Possible? Maybe For These Coins! - YouTube](https://www.youtube.com/watch?v=qeqKjC67eYk) Have fun! ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 15, 2021, 6:24am UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/7 "2021-01-15T06:24:33Z")
@CryptoCap Thank you. Glad I could help a bit. ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 15, 2021, 6:25am UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/8 "2021-01-15T06:25:10Z")
@aldawg77 Thank you. Glad I could help you a bit. ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 16, 2021, 6:00pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/9 "2021-01-16T18:00:13Z")
another interesting post about this topic: > [@Tin vs Drop tokens](https://gov.centrifuge.io/t/tin-vs-drop-tokens/547): > > As I dive deeply into the Centrifuge chain I am curious about many things. One thing that I don’t fully understand and would like more clarification on is how the Tinlake pools are determined to be higher or lower risk? I understand that the tokens used for collateral with Maker Dao will be Drop (higher risk/ higher return) and Tin (lower risk / lower return). I just don’t know how the process works and want to know more. Please let me know if you understand. ---
**Author:** ![civ42](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/civ42/32/317_2.png) [@civ42](https://gov.centrifuge.io/u/civ42)\ **Post date:** [January 18, 2021, 12:49pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/11 "2021-01-18T12:49:20Z")
The saying, “a picture is worth a thousand words”, is not always true. But definitely true in this case! Awesome graph 👍 ---
**Author:** ![bitm00n](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/bitm00n/32/2605_2.png) [@bitm00n](https://gov.centrifuge.io/u/bitm00n)\ **Post date:** [January 18, 2021, 2:38pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/12 "2021-01-18T14:38:19Z")
@civ42 thank you for this kind comment. I am really glad it helped you. ---
**Author:** ![Ivor](https://avatars.discourse-cdn.com/v4/letter/i/ccd318/32.png) [@Ivor](https://gov.centrifuge.io/u/Ivor)\ **Post date:** [January 19, 2021, 1:13pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/13 "2021-01-19T13:13:49Z")
I have been researching DROP and TIN for the past few days and I think that I found how do DROP and TIN tokens work. If I made wrong assumptions please feel free to tell me so (I am still learning 🙂 ). When you invest in tinlake pool you get TIN and DROP tokens, in the ratio that you specified. Let’s assume that you invested 10k USD and that the ratio is 8k USD in DROP and 2k in TIN, and let’s assume that senior tranche is guaranteed a fixed return of 4%, and the pool we invested is targeting 7,5% average annual interest rate. We have 3 scenarios: 1. Pool reached 7.5% interest rate, and there is no default rate - Profit from our initial investment is 750 USD. Drop holder (senior tranche) is the first to receive payment, in the amount of 4% of 8kUSD which equals 320. The remainder of the profit, 430 USD goes to TIN holder, which in turn is a profit of 21,5% 2. Pool reached 7,5% interest rate but there is 3% default rate - Out of our initial 10kUSD, 3% of the assets defaulted, which means that the value of our portfolio is 3% less, and our profit is 427,5 USD. Again the senior tranche is the first to receive its fixed return of 4% which is 320 USD. This leaves us with residual interest of 107.5 USD. But we had 3% default rate, which is 300 loss, and TIN holder (junior tranche) is the one taking the loss and their value drops to 1700USD. They still receive residual intrest which brings them to the value of 1807,5 USD, which is a loss of 9,625%. 3. Potential defaults are equal as volume of junior tranche - This is the lowest point where the senior tranche is protected. In this case senior tranche still gets fixed 4% of interest and all losses are transfered to TIN holders. Best regards, ---
**Author:** ![lucasvo](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.centrifuge.io/lucasvo/32/21_2.png) [@lucasvo](https://gov.centrifuge.io/u/lucasvo)\ **Post date:** [January 19, 2021, 1:35pm UTC](https://gov.centrifuge.io/t/drop-vs-tin-differences/794/14 "2021-01-19T13:35:19Z")
Closed on January 19, 2021, 1:35pm UTC