Kraken’s co-founder and CEO Jesse Powell recently shared in an interview with Bloomberg News that the cryptocurrency exchange will launch an unchanging token market (NFT) that will allow users to borrow money against their NFTs.

Powell explained that the company plans to enter the NFT area in early 2022 and hopes to add a function to determine the liquidation value of an NFT and whether it can be offered as collateral for a loan.

“If you deposit CryptoPunk on Kraken, we want to be able to reflect this amount on your account,” Powell said, “if you want to borrow money for this.”

However, NFTs are valuable across the spectrum, with only a small percentage of token holders owning digital assets worth up to CryptoPunk, which has a base price of 66.9 Ether (ETH) or $ 273,673 at press time.

According to Powell, the NFT tool will explode next year:

“The first phase was speculation, the second phase was art purchases and support for artists, and the third phase was the functional use of NFTs.”
In addition, Kraken recently acquired Staked, an infrastructure platform that allows the aggregation of cryptocurrencies that are not stored to attract new investors. Kraken customers will now be able to receive and redeem crypto rewards while retaining control of their digital assets.

Founded in 2011, Kraken has become one of the largest cryptocurrency exchanges in the world, ranked first in terms of average liquidity, volume and digital asset reserves, according to CoinMarketCap.

Related topics: Nexo collaborates with Three Arrows Capital to launch NFT technology lending and financing service

Kraken’s announcement shows how NFT-supported loans are becoming more popular as more DeFi platforms such as Arcade and Nexo adopt this new lending model. As Cointelegraph recently reported, Arcade completed a $ 15 million round of funding in December as part of a broader effort to expand its offering and attract more investors to the NFT-secured platform.

Source: CoinTelegraph