Monday, July 4

Kraken works to provide loans backed by NFT

Key facts:
  • Kraken’s new system will determine the liquidation value of the deposited NFTs.

  • Kraken CEO Jesse Powell expects growth in NFT use cases by 2022.

US cryptocurrency exchange Kraken is working on its own non-fungible token (NFT) market, CEO Jesse Powell told Bloomberg. The service would launch in early 2022 and allow users to apply for loans backed by collectibles deposited in their accounts.

The information, disclosed this Friday, December 24, indicates that the market would offer purchase, sale and custody services, in addition to loans guaranteed by NFT. Powell commented that they are looking for a mechanism that allows to determine the liquidation value of the tokens, so that, if a user “deposits a CryptoPunk in Kraken”, he can see that value reflected in his account.

Kraken will step into the NFT market by virtue of the fact that, as expressed by its CEO and founder, 2021 became the year of non-fungible tokens. Other large exchanges began to enter the area from the middle of the year. Such is the case with Binance, which launched a decentralized NFT market in June; and FTX, which did the same in August; as reported by CriptoNoticias promptly.

More use cases for NFTs to be created in 2022

In Powell’s view, in 2022 the use cases for NFTs will grow, since this specific market would have already completed a first phase of speculation and the second, of art collection and support for creators. “Phase three will be the functional uses of the NFTs,” said the executive, who suggested that using them as collateral could be one of them.

In fact, the use of NFT to back loans can already be seen on some platforms. In early November this year, CriptoNoticias reported a loan granted for USD 1.4 million, backed by a unique piece of digital art, belonging to the Autoglyphs collection. The operation was carried out in the market peer to peer (P2P) NFTfi.

Kraken founder Jesse Powell believes that by 2022 non-fungible tokens (NFTs) will have more functional uses. Source: Sashkin / stock.adobe.com

Founded in 2011, Kraken is among the oldest bitcoin exchanges in the ecosystem. Currently, it has operations in the United States, the European Union, Canada and Japan. Its founder said he was shocked by the explosion of NFTs, a concept that emerged from Bitcoin developers during its initial stages.

«It is something shocking. During the first 10 years of Bitcoin, we tried very hard to sell people why they should be interested in Bitcoin. I guess it took the right mix of events … to really get people talking about it, “Powell said in the interview.

A week ago, asked for his opinion on the future of Bitcoin, Jesse Powell said that he is actually more concerned with how “the US dollar is moving these days, when we wonder where its bottom is.” The founder of Kraken recommended not to save in dollars in 2022, but to invest in bitcoin for the long term.

Reference-www.criptonoticias.com

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