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Finance

Kraken to Develop NFT Marketplace Offering Token-Backed Loans

The marketplace will determine NFTs’ liquidation value before they are used as collateral.

By Eliza Gkritsi
AccessTimeIconDec 24, 2021 at 9:16 a.m. UTC
Updated May 11, 2023 at 6:02 p.m. UTC
The artists rolled into Miami with a wrapped bus touting their new NFT project. (Eli Tan/CoinDesk)
The artists rolled into Miami with a wrapped bus touting their new NFT project. (Eli Tan/CoinDesk)

Crypto exchange Kraken is developing a marketplace for non-fungible tokens (NFTs) where users can arrange loans using the tokens as collateral, the exchange’s founder and CEO Jesse Powell said in a Bloomberg News interview published Friday.

  • The marketplace will provide custody, and the exchange is figuring out how to determine the liquidation value of NFTs deposited so that users can use them as collateral for loans, Powell said.
  • Kraken follows major exchanges like Coinbase and FTX in developing an NFT market as the assets continue to soar in popularity. OpenSea, one of the most important marketplaces for NFTs, conducted just over $2 billion in trading volume in the past 30 days according to DappRadar data.
  • Decentralized finance project NFTfi, founded in February 2020, and crypto lender Nexo already offer NFT-backed loans, but Kraken will probably be the biggest exchange thus far to try it. The exchange is among the top 20 globally by trading volume, data from CoinGecko show.
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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Eliza Gkritsi
    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.

    Follow @egreechee on Twitter
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