Kraken, a cryptocurrency exchange is developing its own NFT marketplace where consumers can buy and sell JPEGs and borrow funds against their collections.
Kraken is working on its own NFT marketplace
Kraken, a cryptocurrency exchange, is purportedly working on its own NFT marketplace, where customers may purchase and sell various JPEGs.
Furthermore, Jesse Powell, the exchange’s CEO, stated that digital art collectors may be able to borrow against their collections.
“We want to be able to reflect the value of that in your account if you deposit a CryptoPunk on Kraken,” Powell said in a Bloomberg interview.
He went on to say, “And if you want to borrow funds against that,” implying that a CryptoPunk could be used as collateral to borrow other cryptocurrencies or stablecoins.
According to Powell, the financialization of NFTs constitutes “phase three” of the sector’s evolution. “Phase one was speculation, phase two was buying art and supporting artists, and phase three will be practical applications of NFTs,” he explained.
2021 was a big year for NFT
Non-fungible tokens (NFTs) had a big year in 2021, with the technology exploding from the crypto niche to the mainstream (and earning the title of Collins Dictionary’s word of the year in the process).
Following the sale of digital artist Beeple’s NFT ‘EVERYDAYS: The First 5,000 Days’ at Christie’s in 2021, NFTs first made headlines. In early March, the transaction brought in more than $69 million, making it the third-largest single sale by a living artist.
Existing marketplaces like OpenSea, as well as collections like Bored Ape Yacht Club and CryptoPunks, reported record-breaking volumes.
Kraken, on the other hand, is a little late to the party. Binance and FTX, two rival crypto exchanges, have already opened their own NFT marketplaces this year in the hopes of capturing a piece of the action.
Coinbase’s product is likewise in the works, with a waitlist of millions of eager people who have signed up.
Last week, Nexo, a cryptocurrency lending and borrowing platform, announced the release of an NFT collateralization solution.
“Services like Nexo’s lending will be in high demand to unlock NFTs’ underlying value while allowing users to retain ownership,” said Antoni Trenchev, Nexo’s co-founder.
The first two eligible collections will be Bored Ape Yacht Club and CryptoPunks, according to the business, with more collections to be announced soon.