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Crypto exchange Kraken’s new NFT market to issue loans

Jesse Powell said the exchange will expand into a market for non-fungible tokens and loans guaranteed by NFT starting in 2022.

Kraken founder and CEO Jesse Powell recently shared in an interview with Bloomberg News that the crypto exchange will launch a non-fungible token (NFT) marketplace 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 ability to determine the liquidation value of an NFT and whether it can be placed as collateral for a loan.

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

However, the value of NFTs is across the spectrum and only a small percentage of token owners own a digital collectible valued as much as a CryptoPunk, the minimum price of which is 66.9 Ether (ETH) or $ 273,673 at the time of. the publication.

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

"Phase one was speculation, phase two is buying art and supporting artists, phase three will be the functional use of NFT."

Additionally, Kraken recently acquired Staked, an infrastructure platform that enables custodial encryption, in an effort to attract new investors. Kraken customers will now be able to earn crypto income and rewards while maintaining control over their digital assets.

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

Kraken’s announcement demonstrates how NFT-backed loans are becoming increasingly common as more DeFi platforms like Arcade and Nexo offer this new loan model. As Cointelegraph recently reported, Arcade closed a $ 15 million funding round in December as part of a broader effort to increase its offerings and attract more investors to its guaranteed NFT platform.

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