The exchange Kraken enters the market with the launch of the L2 chain Ink, eyeing Coinbase's quarterly revenue of 53 million dollars from Base
About 40 people in the Kraken team are developing Ink, and the testnet will launch later this year.Author: Felix, PANews
On October 24, the cryptocurrency exchange Kraken announced plans to launch the L2 network Ink on Ethereum in early 2025. This network will focus on DeFi, allowing token trading and lending without intermediaries. The Ink testnet will launch later this year, enabling developers to try out Ink applications on the testnet. The Ink mainnet is expected to open to retail and institutional users in the first quarter of next year.
Ink is built on the open-source, MIT-licensed OP Stack codebase from Optimism, joining the broader Ethereum ecosystem. In addition to benefiting from Ethereum's security, Ink will also become part of the OP Superchain. This unified blockchain network shares security, governance, and values, using a common standard codebase to help scale Ethereum.
Notably, Ink founder Andrew Koller stated in an interview that Kraken does not intend to issue its own token. Additionally, Kraken has collaborated with Optimism to release a limited edition NFT to thank early supporters.
Currently, about 40 people on the Kraken team are developing Ink. The company is already planning events for developers, including Devcon in Thailand in November.
After benefiting from launching chains, exchanges are competing to follow suit
After seeing how blockchain helped drive Binance's revenue and user growth, various cryptocurrency exchanges have launched their own blockchains. Binance's BNB Chain and its associated tokens have become some of the most popular tokens. Coinbase has also successfully entered this field, with Base experiencing a 300% quarter-over-quarter increase in trading volume driven by app and memecoin releases. Recently, even the decentralized exchange Uniswap announced the launch of an L2 network.
Although DeFi applications have existed for years, they are considered too complex for the average user. Kraken is trying to simplify the experience, making it cheaper and more intuitive to earn yields and perform other functions using DeFi. Ink founder Andrew Koller stated that Ink applications will be offered through the Kraken Wallet app.
"This is a very easy-to-use, Apple-like experience." "Over time, our users will have both centralized and decentralized ecosystems. We want you to feel like you are doing something familiar."
Ink is expected to debut with more than a dozen available DAPPs, such as decentralized exchanges and aggregators. Initially, Kraken will act as the sequencer for Ink, earning revenue by organizing and managing transactions on the network, but this function will eventually be decentralized and shared among multiple parties. According to Coinbase's shareholder letter, the sequencer revenue for Coinbase's Layer2 network Base was $53 million in the second quarter.
Optimism becomes a hot commodity
Creating one's own L2 network is not a new concept. Other L2 networks (such as Polygon, zkSync, Starknet, and Arbitrum) have launched their own stacks, hoping institutions will choose their technology.
However, Optimism has recently become highly sought after, becoming a hot commodity. Mainstream crypto companies and even non-crypto companies are choosing to use Optimism as the blueprint for their networks. Companies developing rollups using Optimism code include Base, Sony, Uniswap, and the World Network (formerly known as Worldcoin) supported by Sam Altman.
The Optimism chain accounts for nearly half of the more than 100 rollup transactions on Ethereum. There are at least 43 rollups using Optimism technology, with a total TVL of $18.1 billion. These are referred to as the "Superchain" by the head of the Optimism project, while only 29 projects use Arbitrum technology.
Although the surge in rollups has diluted Ethereum's liquidity, Optimism plans to launch a new token standard in 2025 to enable interoperability between blockchains using its code.
In a statement, Kraken said: "Ink will support SuperchainERC20 at launch, allowing users to easily move within the Superchain ecosystem and laying the groundwork for more seamless interactions between Ink and other OP Chains."
Founded in 2011 and headquartered in San Francisco, Kraken is currently expanding into new product areas and markets while continuing to consider the possibility of an initial public offering (IPO). Earlier this year, Kraken was considering a final round of funding before the IPO.
Like many cryptocurrency companies, Kraken's future may depend on whether U.S. cryptocurrency policy changes after the upcoming U.S. elections. Last year, the U.S. SEC charged Kraken with operating as an unregistered broker, dealer, exchange, and clearing agency. In February 2023, Kraken reached a separate settlement with the U.S. SEC regarding its staking business, agreeing to pay $30 million in illegal gains, prejudgment interest, and civil penalties.
