Kraken To Launch Its Own Blockchain in 2025

One of the world’s oldest cryptocurrency exchanges, Kraken, is launching a blockchain early next year.

Called Ink, the blockchain will host decentralized applications that enable trading, borrowing, and lending of tokens independently and without intermediaries involved.

Kraken Launches “Ink” Blockchain, No Token Planned

Kraken is reportedly launching its own Layer 2 blockchain, similar to the move made by its competitor, Coinbase. The new network, called Ink, uses similar technology to Coinbase’s Layer 2 platform, Base. The latterh has grown to become a powerhouse in the DeFi space since its launch. From the company they hope this to be a successful project. Just recently, Solana’s Co-Founder Anatoly Yakovenko discussed Base Layer 2’s rapid growth, highlighting its impact on Ethereum market position.

Ink will launch a testnet later this year, giving developers an opportunity to start building applications on the chain. According to Andrew Koller, Ink’s founder, the network is expected to open in the first quarter of next year. It will open for both retail and institutional users.

Introducing Ink.

A single, integrated DeFi ecosystem here to make onchain easier.

Join us: pic.twitter.com/tH4nqENKZ7

— ink (@inkonchain) October 24, 2024

The move also signifies the latest attempt by the cryptocurrency exchange to expand further into the DeFi ecosystem and provide more decentralized services. In that it is joining its rival Coinbase, which did the same with Base.

This move catalyzes user growth and revenue increases. Similar tactics have paid off for Binance and its BNB Chain, a global favorite.

In the case of Coinbase, its Base network saw a 300% increase in transaction volume in Q2. This was primarily because of new app and meme coin activity.

Simplifying DeFi with New Blockchain

The blockchain should go live early next year. It supports the facilitation of dApps with no intermediary services. It does not plan to issue a native token, said Koller. He added this is making it substantially different from the approach decided upon by Binance’s and Coinbase’s strategy.

Kraken wants to make it easier to use DeFi with its new blockchain, Ink, which will directly integrate into it Wallet app. Applications with DeFi have existed for a number of years, but most are deemed too complex for mass usage. Koller said that the exchange hopes to break that trend with an intuitive user interface “Apple-esque.”

Ink will launch with over a dozen DeFi applications. It will include decentralized exchanges and aggregators, focusing on makin earning yield and other functionality easier and cheaper. Over time, the exchange also hopes to add support for real-world assets and sophisticated lending applications. The move follows Base—Coinbase’s blockchain—which saw a flurry of activity, especially around meme coins.

It plans to be the first sequencer on its blockchain, Ink, where it will centralize and monetize the role before decentralizing further to multiple parties sharing responsibilities.

This is an attempt to parallel success following Coinbase’s Base blockchain, which generated $53 million in sequencer revenue in Q2 alone. Ink has a team of about 40 people who work on it constantly. Events have already been lined up for developers-targeted events, including going to Devcon in Thailand this November to get on board.

Kraken Eyes IPO, But US Regulation Looms

San Francisco-based company began with work in 2011 and, while weighing an IPO, has been growing its suite of products and presence worldwide. In early 2023, the media reported the exchange was weighing one final fundraising round ahead of a public listing.

However, its future will most likely be heavily interfered with by regulatory changes in the US after this election period, especially after some legal disputes. In 2022, the SEC charged Kraken with operating an unregistered broker-dealer, exchange, and clearing agency, and in early 2023, it settled additional charges about its staking services.

These regulatory pressures are putting a finger on the uncertain landscape that the exchange, among other crypto companies, faces in the United States. Recently, the exchange rolled out Wrapped Bitcoin (kBTC), an ERC-20 token fully backed by BTC, to boost adoption and utility across decentralized finance (DeFi) platforms.

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