The marketplace will enable customers to use their NFTs as collateral for loans. Kraken CEO says the NFT marketplace could be up and running as early as February 2022
Kraken cryptocurrency exchange customers will soon be able to use their non-fungible tokens (NFTs) as collateral for loans. The exchange’s founder and CEO Jesse Powel revealed during a Bloomberg interview the firm will launch its NFT marketplace in early 2022. Powel said they hoped to add the feature to determine the liquidation value of an NFT and if it can be put up as collateral for a loan. He told Bloomberg:
“If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account. And if you want to borrow funds against that.”
The next phase would be the practical uses
Powell referred to the CryptoPunk collection of 10,000 pixel-art images considered a groundbreaking project for NFTs, or digital representations of art, music, and other items that live on blockchains.
The Kraken CEO opined that NFTs were now in the second of three growth phases, beginning with speculation and growing to buying art and supporting artists. The next phase, he said, would be the practical uses. This isn’t in doubt, seeing that, while an NFT can hold anything from a share of stock to a fraction of a house, the vast majority are art, avatars, and in-game items — and lately metaverse property. Powell said:
“Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs.”
Find more to do with their NFTs
NFTs burst into the famous zone following the successful sale of Mike Beeple’s digital collage called “Everydays: The First 5,000 Days” for $69.5 million at Christie’s. There have been many avatars, basically portraits of an imaginary person or thing, but the top is CryptoPunks and Bored Ape Yacht Club (BAYC), where rare items have sold for millions.
According to Powel, the Kraken NFT marketplace would offer custody services and is intended to appeal to people to find more to do with their NFTs than simply collecting them. In an earlier interview, he had hinted at the NFT plans by the platform with an 8.5 million customer base.
Kraken now joins a growing list of cryptocurrency exchanges like Binance and FTX that have opened NFT marketplaces and Coinbase with its waiting list of millions of people who want to join its NFT marketplace. OpenSea, meanwhile, is one of the NFT world’s largest marketplaces, but it doesn’t offer custody services.