Cryptocurrency exchange Kraken is building its nonfungible token (NFT) exchange and wants to implement new features.
The CEO of cryptocurrency exchange Kraken Jesse Powell discussed the company’s upcoming NFT platform during a recent interview with Bloomberg News. He stated that the NFT space is expected to enter the utility phase of its adoption. He stated that;
“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.”
Powell believes that the next phase in the NFT space is utility. Beyond just buying and selling the NFTs, Powell believes that NFTs will gain more usage, especially in the decentralised finance (DeFi) sector. He added that;
“Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs.”
Kraken wants to become the first centralised crypto exchange to launch an NFT platform that would allow people to use their NFTs as collateral. As a result, Kraken acquired Staked, an infrastructure platform that allows for non-custodial crypto staking, in a bid to attract new investors.
Kraken joins other leading cryptocurrency exchanges, including Binance, Coinbase and FTX, in launching an NFT platform. The NFT space has become very competitive, thanks to the massive growth recorded this year.
In 2020, the total NFT trading volume was only $33 million. However, the figure has grown to $1.3 billion in 2021, representing a 43,000% increase year-over-year. The surge in NFT trading volume has attracted big players such as Binance and Coinbase into the market.
OpenSea remains the largest NFT marketplace, responsible for more than 80% of the total trading volume. The NFT space is expected to become even bigger over the coming year as more companies and investors enter the market.