Kraken Develops NFT Trading Platform, Offering Token-Backed Loans
Nicholas Otieno Dec 29, 2021 03:00
Kraken joins the race of offering NFTs custodial services to take a piece of the pie in the $7 billion NFT market that continues soaring in popularity.
On December 24, U.S.-based cryptocurrency exchange Kraken announced that it is developing a marketplace for NFTs where users can trade digital art and collectables and organize loans using the tokens as collateral.
Jesse Powell, the CEO and founder of Kraken, accepted an interview with Bloomberg media outlets. He disclosed that the exchange is developing a marketplace that will offer custodial services for NFTs and facilitate loans for users using such assets as collateral.
In his conversation, the Kraken CEO regarded 2021 as the year of nonfungible tokens, which will be remembered in history as the period in which NFTs become mainstream. Powell admitted that interest in NFTs has been increasing, thus driving a rise in capital inflow. He expects rising demand to attract retail and institutional investors to the NFT platform and provide more than selling and buying digital art and collectables.
Powell talked about the development and said: “If you depos't a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account. And if you want to borrow funds against that.”
The Rush to Make Money on NFTs
Kraken follows major exchanges such as Gemini, Binance, Coinbase, and FTX to develop an NFT market as the assets continue to surge in popularity. As reported by Blockchain.News, nonfungible tokens’ market has grown to currently worth more than $7 billion, according to nonfungible.com and tech-tracking company L'Atelier BNP Paribas. In 2020, investments in NFTs has increased by nearly three times, gaining popularity as crypto-assets such as Bitcoin continue to boom. Opensea, the largest marketplace for NFTs, recently conducted more than $2 billion in trading volume in the last 30 days, according to Crypto data firm DappRada.
NFT resellers and creators have made hundreds of millions. In March, artist Beeple smashed digital art records and became one of the most successful living artists when he sold a crypto art piece for almost $70 million. NFTs encompass digital real estate, virtual gaming, digital trading cards, and art. Unlike major crypto coins such as Bitcoin and Ethereum, NFTs cannot be directly exchanged with one another and are spread out across many different types of platforms. Of course, most platforms require users to have a digital wallet and use crypto platforms.
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