Crypto exchange Kraken’s new NFT marketplace for issuing loans

Kraken founder and CEO Jesse Powell recently shared in an interview with Bloomberg News that the cryptocurrency exchange will launch a non-fungible token (NFT) market that will allow users to borrow funds against their NFTs.

Powell explained that the company plans to enter the NFT space in early 2022 and hopes to add the functionality to determine the liquidation value of an NFT and whether it can be pledged as collateral for a loan.

“If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of it in your account,” said Powell. “What if you want to borrow money against that.”

The value of NFTs, however, is ubiquitous and only a small percentage of token owners hold a digital collectible as valuable as a CryptoPunk, which has a floor price of 66.9 Ether (ETH) or 273. $ 673 at time of publication.

According to Powell, the NFT utility will explode next year:

“The first phase was speculation, the second phase is to buy art and support artists, the third phase will be devoted to functional uses of NFTs.”

Additionally, Kraken recently acquired Staked, an infrastructure platform that enables non-custodial crypto staking, with the aim of attracting new investors. Kraken customers will now be able to earn crypto rewards and returns while maintaining control of their digital assets.

Kraken was founded in 2011 and has grown to become one of the largest crypto exchanges in the world, ranking among the best in average liquidity, volume and digital asset pools, according to data from CoinMarketCap.

Related: Nexo partners with Three Arrows Capital to launch NFT art lending and financing service

Kraken’s announcement shows how NFT-backed loans are becoming more common as more DeFi platforms, such as Arcade and Nexo, come up with this new lending model. As TBEN recently reported, Arcade closed a $ 15 million funding round in December as part of a larger effort to expand its offerings and attract more investors to its guaranteed NFT platform. .