Kraken, one of the oldest cryptocurrency exchanges in the world, has announced that it will be introducing a blockchain in the early part of the next year.
Kraken, one of the earliest cryptocurrency exchanges in the world, is set to introduce a blockchain in the early part of the following year.
The blockchain, referred to as Ink, will be the host of decentralized applications that facilitate the autonomous trading, borrowing, and lending of tokens without intermediaries.
Kraken Introduces “Ink” Blockchain; No Token Is Scheduled
Kraken is introducing its own Layer 2 blockchain, a strategy comparable to its competitor, Coinbase. Ink, the new network, employs technology similar to Base, the Layer 2 infrastructure of Coinbase. Since its inception, the latter has evolved into a dominant force in the DeFi sector.
The company anticipates this endeavor to be successful. Anatoly Yakovenko, the Co-Founder of Solana, recently addressed the accelerated expansion of Base Layer 2, emphasizing its influence on the Ethereum market position.
Later this year, Ink will introduce a testnet, which will allow developers to begin developing applications on the chain. The network is anticipated to commence operations in the first quarter of the following year, as per Andrew Koller, the founder of Ink. It will be accessible to both institutional and retail users.
The move also represents the latest endeavor by the cryptocurrency exchange to further expand into the DeFi ecosystem and offer more decentralized services. In this regard, it is aligning itself with its competitor, Coinbase, which followed suit with Base.
This action stimulates revenue growth and user development. Binance and its BNB Chain, a global darling, have succeeded through comparable strategies.
Coinbase’s Base network experienced a 300% increase in transaction volume during the second quarter. This was predominantly due to the activity of meme coins and new applications.
Streamlining DeFi through the Implementation of New Blockchain
The blockchain is anticipated to be operational by the beginning of the following year. It facilitates the development of decentralized applications (dApps) without intermediary services. Koller stated that there are no plans to issue a native token. He also noted that this is a significant departure from the strategy adopted by Binance and Coinbase.
Kraken intends to simplify the process of utilizing DeFi by incorporating its new blockchain, Ink, directly into its Wallet app. DeFi applications have existed for several years; however, most are considered too intricate for widespread application. Koller stated that the exchange aspires to buck this trend by implementing an intuitive user interface reminiscent of Apple.
Ink will be introduced with more than a dozen DeFi applications. It will encompass aggregators and decentralized exchanges, emphasizing simplifying and reducing the cost of earning yield and other related functions.
The exchange also aspires to incorporate future support for real-world assets and sophisticated lending applications. The action is in response to the recent surge in activity on Base, Coinbase’s blockchain, particularly in the context of meme currencies.
It intends to serve as the initial sequencer on its blockchain, Ink and will centralize and monetize the position before decentralizing further to allow multiple parties to share responsibilities.
This is an endeavor to replicate the success of Coinbase’s Base blockchain, which generated $53 million in sequencer revenue in Q2 alone. A staff of approximately 40 individuals is dedicated to the continuous operation of Ink. Developer-oriented events have already been scheduled, such as participating in Devcon in Thailand this November.
Kraken Prepares for an Initial Public Offering, Regulations in US Are Impending
The company, headquartered in San Francisco, commenced operations in 2011. It has expanded its product line and global presence despite contemplating an IPO. The media reported in early 2023 that the exchange was considering a final fundraising round before a public listing.
Nevertheless, its destiny is likely to be significantly impacted by regulatory changes in the United States following this election period, particularly in the wake of certain legal disputes. Kraken was accused by the Securities and Exchange Commission (SEC) in 2022 of operating an unregistered broker-dealer, exchange, and clearing agency. Subsequently, in early 2023, Kraken resolved additional charges regarding its staking services.
These regulatory pressures highlight the uncertain landscape that the exchange, among other crypto companies, confronts in the United States. The exchange recently introduced Wrapped Bitcoin (kBTC), an ERC-20 token backed by BTC, to increase the utility and adoption of decentralized finance (DeFi) platforms.
