The cryptocurrency exchange Kraken is working on an NFT marketplace that will offer a wide range of services, including lending-related features. This was disclosed by CEO Jesse Powell in an interview with Bloomberg.
According to him, the platform will provide clients with custodial services. Kraken is also considering the creation of a system in which clients can use NFTs as collateral for loans.
“If you place a CryptoPunk token on Kraken, we want to be able to reflect its value on your account. If you wish, you will be able to borrow funds against that collateral. The company is working on a system to determine the liquidation value of deposited NFTs,” Powell said.
The head of the exchange believes that in 2022 the NFT use cases will broaden significantly. In his view, using tokens as collateral is only one of the possible options.
“The first phase is speculation, the second is purchasing art and supporting artists, the third is functional use of NFTs,” he explained.
NFT-backed lending is a relatively new [10 — virus] field. The concept of such loans was introduced in January last year when developer Alex Masmej announced the Rocket project, which never launched.
Several players are now present in the market in some form. Among the largest are NFTfi, Strip Finance, Drops DAO and Unbanked.
Given the NFT-related risks, these platforms lend at high rates—from 15% to 20%. As they operate in the DeFi space, lenders can earn significant profits.
Loan amounts in this segment already run into the millions of dollars. For example, in October on the NFTfi platform approved a loan of $1.42 million. The collateral was Autoglyph #488 from Larva Labs.
Venture investors are backing this nascent field as well. On December 22, Arcade raised $15 million in a Series A round. Its launch is planned for Q1 2022.
In December, Kraken acquired the staking platform Staked. The company called the deal one of the largest acquisitions in the industry, but did not disclose financial details.
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