Cryptocurrency exchange Kraken is working on an NFT marketplace that will offer a wide range of services, including those related to lending. The head of the company Jess Powell told about this in an interview with Bloomberg.
NFT – loan collateral
According to him, the platform will provide customers with custodial services. Kraken is also considering creating a system where customers can use NFTs as collateral for loans.
“If you list a CryptoPunk token on Kraken, we want to be able to reflect its value in your account. If you wish, you can borrow funds against this collateral. The company is working on a system for determining the liquidation value of deposited NFTs, ”Powell said.
The head of the exchange believes that in 2022, the scope of NFT will expand significantly. In his opinion, the use of tokens as collateral is only one of the possible options.
“The first phase is speculation, the second is buying art and supporting artists, and the third is the functional use of NFT,” he explained.
Lending secured by NFT is a relatively new [10 – virus] direction. The concept of such loans was presented last January when developer Alex Masmei announced the Rocket project, which never got off the ground.
Now there are several players on the market, offering similar services in one form or another. Among the largest are NFTfi, Strip Finance, Drops DAO and Unbanked.
Due to the inherent risks of NFT, these platforms issue loans at high rates – from 15% to 20%. Since we are talking about representatives of the DeFi sector, lenders can make significant profits.
Loans in this segment have already reached millions of dollars. For example, in October, a loan of $ 1.42 million was approved on the NFTfi platform. The collateral was NFT from Larva Labs – Autoglyph # 488.
Venture investors also support the young direction. On December 22, Arcade raised $ 15 million in a Series A funding round. It is scheduled to launch in Q1 2022.
As a reminder, in December, Kraken acquired the Staked staking platform. The company called the deal “one of the largest acquisitions in the industry,” but did not disclose financial details.