Kraken NFT marketplace users to be able to use CryptoPunks as collateral

Kraken is reportedly developing its own NFT marketplace, through which users can buy and sell many NFTs.

Kraken NFT marketplace users to be able to use CryptoPunks as collateral

Kraken is reportedly developing its own NFT marketplace, through which users can buy and sell many NFTs.

Furthermore, Jesse Powell, the CEO of the exchange, stated that collectors of digital art may also be able to borrow against their collections.

"The value of CryptoPunks deposited on Kraken should be reflected in accounts," Powell said during a Bloomberg interview.

"It can also be used as collateral to borrow other crypto assets or stablecoins," he said, suggesting that a CryptoPunk could be used as collateral.

Jesse said, "It's kind of shocking." Powell explained that the idea for NFTs preceded Bitcoin in the early days of crypto when developers proposed "tagging" parts of the bitcoin blockchain with metadata.

In his own words, "I guess it took the right combination of events, something as popular as NBA Top Shots to make people take notice."

Powell referred to the financialization of NFTs as "phase three" of the development of the sector. According to him, phase one involved speculation, phase two involved buying art and supporting artists, and phase three will involve the use of NFTs for functional purposes.

As well as existing marketplaces, such as OpenSea, collections like Bored Ape Yacht Club and CryptoPunks posted record-breaking volumes.

Kraken, however, joined the party late. FTX and Binance have already launched respective NFT marketplaces this year in an effort to capture a piece of the market.

The Coinbase waitlist has already topped millions of users, and Coinbase is also developing a product.

Nexo also launched an NFT collateralization product last week, which is a crypto lending and borrowing platform. Nexo's co-founder Antoni Trenchev said that "NFTs’ underlying value will be unlocked by services like Nexo's lending."

Two of the first eligible collections will be Bored Ape Yacht Club and CryptoPunks, and more will be announced soon, according to the company.