Kraken Credit Facilitation In Crypto Form With NFT Guarantee

At Kraken you can get credit in the form of crypto currency. (photo credit: pixabay)

JAKARTA – Kraken co-founder and CEO Jesse, Powell recently shared in an interview with Bloomberg News that the crypto exchange will launch a nonfungible token marketplace (NFT) that will allow users to borrow funds against their NFT collateral.

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

“If you keep CryptoPunk on Kraken, we want to be able to reflect its value in your account", Powell said, continuing, “and if you want to borrow funds for it."

The value of NFTs, however, exists across the spectrum, and only a small minority of token owners hold CryptoPunk's worth of digital collections, whose base price is 66.9 Ether (ETH) or 273,673 US dollars at the time of publication.

According to Powell as quoted by Cointelegraph, NFT utilities will explode next year:

“The first phase is speculation, the second phase is buying art and supporting artists, the third phase will be using NFT functionally", Powell said.

Additionally, Kraken recently acquired Staked, an infrastructure platform that enables non-custodial crypto staking, in a bid to attract new investors. Kraken clients will now be able to earn crypto rewards and results while maintaining control of their digital assets.

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

Kraken's announcement shows how NFT-backed lending is becoming increasingly common as more DeFi platforms, such as Arcade and Nexo, offer this new lending model.

As Cointelegraph recently reported, Arcade closed a US$15 million funding round in December as part of a wider effort to grow its offering and attract more investors to its secured NFT platform.