When you check your social media accounts or read the latest crypto news, you’ll see that NFTs are all the rage these days. These non-fungible tokens are consistently on the rise, so much so that many crypto enthusiasts believe that it will pave the way for more people to adopt crypto.
However, despite its massive popularity, many people still don’t understand why a considerable amount of money is spent on something like NFTs, which are essentially non-functional.
In response to this general confusion, the community of NFT supporters explained the appeal of these tokens. For one thing, you have bragging rights. Other than that, NFTs undoubtedly pique our curiosity and fascination, not to mention how artists can earn a massive amount of money from their art.
However, the question remains: can you use NFTs for something? Do they have any significance in the real world?
According to a report by Bloomberg, Kraken is working on an NFT marketplace. This marketplace will also function as a lending platform where customers can use NFTs as collateral. This information came from Kraken’s founder, Jesse Powell.
During the Bloomberg interview mentioned above, Powell said that he believes NFT adoption will transform in the future, ultimately finding practical uses for these tokens. Considering the real world and how lending is relatively widespread, he believes acting as collateral is how NFTs can be of actual use.
The report explains that the exchange platform Kraken is developing a system that can calculate the liquidation value of every NFT. This way, customers can use their prized non-fungible tokens if they need to borrow some funds. Powell says that if you ever decide to deposit an NFT on Kraken, they want the exact value of that item to reflect in your account.
The Adoption of NFT Came as a Surprise
At this point, many different industries and communities began joining the crypto world due to NFTs. Artists, musicians, politicians, investors, collectors, and more — you name it. Essentially, almost everyone wants a taste of the NFT craze. Powell found it quite “shocking” how easy and quickly NFT’s popularity grew. He says that the community spent ten years convincing people why they should be interested in Bitcoin.
In retrospect, the quick adoption of NFTs makes sense because so many world-renowned people and events were always talking about them. NFTs like NBA Top Shots most likely contributed to the hype.
Powell believes that NFTs will leave a mark in history, especially since they are beginning to become mainstream. Kraken’s founder isn’t the only one who believes this sentiment, though. Countless other CEOs have expressed the same ideas, saying that NFTs will most likely snowball by 2022.
In 2021 alone, NFTs had a total sales volume of over $12 billion. We have Beeple’s unforgettable sale of their art entitled Everydays: The First 5000 Days, worth $69,346,250 or 38,525 ETH. Of course, we also can’t forget the Bored Ape Yacht Club’s 7-day sales volume, which reached $34.1 million.
The NFT industry continues to grow with each passing day, and it appears that Kraken isn’t the only exchange looking to offer lending services via an NFT marketplace. 2022 will undoubtedly be an exciting year for NFTs, and we look forward to seeing what else they can offer.
