Kraken, a marketplace for non-fungible tokens (NFTs) wants to offer a new NFT-based lending service. In exchange for a token as collateral, Kraken will provide funds to the user. While the initiative is still in the works, this could turn out to be a first in the industry and even a first concrete use for NFTs.
"I would like to get a loan of $5000, in exchange I offer you my token of BoredAPE, bought at $3500, but whose value is continuing to increase." It sounds surreal as an exchange but this type of deal could soon become reality... Kraken, a marketplace in the cryptoasset world, is looking to diversify its user base and wants to promote a new use for NFTs. Thus, in exchange for a token (of a certain value), the company would provide you with funds to make another purchase. It's a new type of offer that would essentially be aimed at customers who would like to do more than just collect digital tokens.
"'If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account. And if you want to borrow funds against that,' Kraken is working on a system to determine the liquidation value of the NFT deposited," outlined a Bloomberg News interview with Jesse Powell, Kraken founder. For now, such a service is only in the draft stage, but it could rapidly become a reality.
The first concrete use of NFTs?
Throughout the past year, a boom in NFTs has been observed in multiple sectors. Whether in the field of art, culture, cinema, sports or video games, the examples are numerous. And so are the companies that work in one way or another with these new tokens, to create a stronger relationship with their fans or users of their service. Meanwhile, the stock market is still in the process of determining real values of NFTs to allow customers to use their tokens as collateral. "Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs," added Kraken's CEO.
Kraken's goals in developing this new service also involves attracting users over from the biggest marketplaces such as Binance, FTX and Opensea (for NFTs). Kraken counts a little more than 8.5 million users, double the number of last year. But that figure is still far off those of the sector leaders such as Binance (more than 85 million customers), but as we know, in this sphere anything can change very quickly.