One of the oldest cryptocurrency exchanges globally, Kraken, has announced plans to launch its own blockchain early next year.
Kraken to Launch “Ink” Blockchain Without Native Token
Highlights:
– Kraken is introducing a Layer 2 blockchain named “Ink” to support DeFi applications.
– Unlike its competitors, Kraken does not plan to issue a native token for the blockchain.
– The aim is to simplify and enhance accessibility to DeFi through Ink.
Kraken, one of the world’s most established crypto exchanges, is set to roll out its own blockchain, named Ink, early next year. The new platform will facilitate decentralized applications (dApps) for trading, borrowing, and lending tokens without intermediaries.
Kraken’s Move Into Layer 2 Blockchain: “Ink”
Following the example of its competitor Coinbase, Kraken is launching its Layer 2 blockchain, Ink, which employs technology similar to Coinbase’s Base platform. Since its launch, Base has become a significant player in the DeFi space. Kraken hopes Ink will replicate this success. According to Andrew Koller, the founder of Ink, the network is expected to be available to both retail and institutional users in the first quarter of next year, with a testnet launch planned for later this year.
Kraken’s entry into the blockchain space marks a deeper move into the DeFi ecosystem, aligning with efforts by competitors like Coinbase, which launched its Base blockchain earlier. Such strategies have also benefited Binance with its BNB Chain, which has seen widespread adoption.
Coinbase’s Base network, for instance, experienced a 300% increase in transaction volume in Q2, driven mainly by new applications and meme coin activities. Kraken aims for similar growth with Ink.
Making DeFi More Accessible
Ink is set to go live early next year and will enable dApps to operate without intermediary services. Unlike Binance and Coinbase, Kraken does not plan to issue a native token for Ink. This decision differentiates its approach, focusing on integrating DeFi directly into Kraken’s Wallet app.
Kraken aims to simplify DeFi, which has often been considered too complex for widespread adoption, by creating an “Apple-esque” intuitive interface. Ink will launch with over a dozen DeFi applications, including decentralized exchanges and aggregators, designed to make earning yields and other functions more user-friendly and cost-effective. Over time, the platform will expand to include support for real-world assets and advanced lending applications, taking inspiration from Coinbase’s Base, which saw significant activity, especially around meme coins.
Initially, Kraken will serve as the first sequencer for Ink, centralizing and monetizing this role before gradually decentralizing it across multiple participants. This strategy echoes the success of Coinbase’s Base, which generated $53 million in sequencer revenue in Q2. Kraken has a dedicated team of around 40 people working on Ink, and it plans to engage developers through events, including at Devcon in Thailand this November.
Kraken’s IPO Ambitions and Regulatory Challenges
Founded in San Francisco in 2011, Kraken has been expanding its product offerings and global reach while considering an IPO. In early 2023, reports indicated the exchange was exploring one last round of fundraising before going public. However, future plans could be influenced by regulatory developments in the U.S., especially after recent legal disputes.
In 2022, the SEC charged Kraken for operating as an unregistered broker-dealer, exchange, and clearing agency, and in early 2023, the exchange settled additional charges related to its staking services. These regulatory pressures add to the uncertain environment for crypto companies operating in the U.S.
To enhance adoption and utility across DeFi platforms, Kraken recently introduced Wrapped Bitcoin (kBTC), an ERC-20 token fully backed by BTC, demonstrating its ongoing commitment to expanding within the decentralized finance sector.
