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Kraken’s New NFT Marketplace to Issue Loans

Published 12/28/2021, 08:28 PM
Updated 12/28/2021, 05:30 PM
Kraken’s New NFT Marketplace to Issue Loans

According to Jesse Powell, by 2022, the newly-created exchange will become a marketplace for nonfungible tokens and NFT-backed loans. In a recent interview with Bloomberg News, Kraken co-founder and CEO Jesse Powell said that the crypto exchange would create a nonfungible token (NFT) marketplace to allow users to borrow dollars against their NFTs.

Powell stated that the company intends to join the NFT industry in early 2022 and hopes to provide a function that will allow users to calculate an NFT's liquidation value and whether it can be used 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," said Powell, continuing, "and if you want to borrow funds against that."

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NFT utility, according to Powell, will explode in 2022:

"Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs."

Launched in 2011, Kraken, according to CoinMarketCap data, has grown to become one of the largest cryptocurrency exchanges in the world, ranking among the top in terms of average liquidity, volume, and digital asset reserves.

As additional DeFi platforms, such as Arcade and Nexo, provide this new lending model, Kraken's announcement highlights how NFT-backed loans are becoming more frequent. Arcade secured a $15 million investment round in December, according to Cointelegraph, as part of a larger push to expand its offerings and entice additional investors to its surety-based NFT platform.

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