Next Phase For NFTs: Kraken To Let You Borrow Against Tokens

Next Phase For NFTs: Kraken To Let You Borrow Against Tokens

The NFTs boom is so big right now that many see the non-fungible tokens as the open path to crypto’s mass adoption. However, the popularity hasn’t changed many people’s confusion on why is there’s so much money being spent on something they see as non-functional.

The community has explained the sides of NFTs’ lure: the bragging, the innovative and curious fascination, the investor’s point of view, and the artist’s too. But as my grandmother would ask: What do you eat an NFT with? Meaning, is there any real-world use to non-fungible tokens?

Bloomberg reported that Kraken is working on an NFT marketplace that also works as a lending platform, allowing customers to use the non-fungible tokens as collateral, said the exchange’s founder and Chief Executive Officer Jesse Powell.

Powell suggested during the interview that he foresees the adoption of NFTs evolving into finding functional uses for them, and loans could be a popular real-world case.

Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs,

The report explains that the exchange is designing a system to calculate the liquidation value of each non-fungible token so the users can borrow funds against them. “If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account,” Powell said.

The Adoption Of NFTs Is ‘Kind Of Shocking’

The music industry, artists, collectors, investors, athletes, actors, politicians, there are so many communities entering the crypto space because of NFTs. From Taco Bell to Michael Jordan, everyone wants a piece of this explosive industry.

Powell thinks that “It’s kind of shocking.” He noted that “For the first 10 years of Bitcoin we were trying so hard to sell people on why they should be interested in Bitcoin, … I guess it took the right combination of events, something really popular like NBA Top Shots that really got people talking about it.”

Kraken’s founder thinks non-fungible tokens will go down in history as they are about to make it into the mainstream. He is not alone in the bullish sentiment, many other CEOs have expressed a similar forecast expecting NFTs to ‘snowball’ in 2022.

In 2021, the total sales volume of NFTs has reportedly hit more than $12 billion, with Bored Ape Yacht Club leading with a 7-Day Sales Volume of $34.1 million and Beeple’s historic sale of ‘Everydays: The First 5000 Days’ for $69,346,250 (38,525 ETH).

This industry grows at a rapid pace and Kraken is not the only company looking to provide custody and lending services through an NFT marketplace. Since everyone wants to pitch in and innovate, it seems like 2022 could be an exciting year for Web3 as the NFT boom –and its possible new features– might draw in many new users.

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