What’s Brewing at Kraken?
In an eye-opening interview with Bloomberg News, Jesse Powell, co-founder and CEO of Kraken, unveiled plans for an exciting new venture—a nonfungible token (NFT) marketplace set to launch in early 2022. This isn’t just any marketplace; Kraken is aiming to allow users to borrow funds against their NFTs. Yes, you heard that right! Your digital collectibles could soon become your financial sidekick.
The Vision for NFT Collateral
Powell elaborated on how this feature could revolutionize the use of NFTs. Imagine holding a CryptoPunk and being able to utilize its value as collateral for loans on Kraken. “If you deposit a CryptoPunk on Kraken, we want to reflect its value in your account,” said Powell. It’s like getting a loan, but instead of your grandma’s china, you’re using that rare NFT that everyone’s buzzing about!
The Wild World of NFT Valuation
Now, here’s where things get spicy: the value of NFTs is akin to a rollercoaster ride—thrilling, but you might want to keep your hands inside the ride at all times. At the time of publication, a CryptoPunk carries a floor price of 66.9 Ether (ETH), which translates to a whopping $273,673. However, that’s a luxury not every NFT owner can afford or even match. As Powell noted, only a small fraction of token owners are cashing in with such high-value collectibles.
The Future of NFTs: More Than Just Digital Art
Powell sees huge potential in NFTs beyond mere speculation and art consumption. He confidently stated, “Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs.” For those of you betting against this trend, consider this a friendly reminder that betting against innovation is like betting against ice cream on a hot day—just don’t do it!
Kraken’s Expanding Arsenal
In addition to the NFT marketplace, Kraken recently acquired Staked, a platform focused on non-custodial crypto staking. This acquisition aims to draw in new investors eager to earn crypto rewards while maintaining control over their assets. It’s like giving your digital assets a job while they await retirement!
Keeping Pace with the Competition
With the NFT lending landscape heating up, Kraken’s announcement reflects a growing trend. DeFi platforms like Arcade and Nexo are already on the NFT loan bandwagon, proposing a new model of finance that leverages the excitement of digital assets. As reported, Arcade successfully closed a $15-million funding round to enhance their collateralized NFT platform. The stakes are high, and everyone wants in on the action!
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