Kraken, one of the most popular crypto exchanges, is preparing to unveil its own blockchain network in early 2025. This move will focus on decentralized finance (DeFi) services such as trading, lending, and borrowing without intermediaries.
Crypto Exchange Kraken to Launch Own Blockchain Network
The upcoming blockchain, named Ink, will operate similarly to Coinbase Global Inc.’s Base. Base, which launched over a year ago, has grown to be a major DeFi platform. According to Ink’s founder, Andrew Koller, a testnet for developers will launch later this year, allowing early experimentation with applications.
By the first quarter of next year, the platform is expected to be fully accessible to retail and institutional users, according to a Bloomberg report. However, despite the blockchain’s launch, Kraken does not plan to issue a token for Ink, as clarified by Koller.
Kraken aims to streamline the complexities often associated with DeFi. By focusing on a user-friendly experience, the company hopes to make decentralized financial tools more accessible. “We want you to feel that you are doing something familiar,” Koller explained. He described Ink as offering an “Apple-esque” interface.
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Moreover, the Ink apps will be integrated into the Kraken Wallet, aiming to make DeFi services, including yield generation, cheaper and simpler to use. Upon its initial launch, Ink will support over a dozen applications, including decentralized exchanges and DApp aggregators. Koller also mentioned that the chain might later host real-world assets and advanced lending platforms.
As of now, the primary function of the blockchain will be managed by Kraken as the chain’s sequencer, responsible for transaction organization. Over time, however, this function will be decentralized, allowing multiple parties to participate. Sequencing has proven profitable; Coinbase generated $53 million from its sequencer role in the second quarter of 2024.
Growing Competition
Crypto exchanges have increasingly turned to blockchain development after observing successful efforts from Binance and Coinbase. Binance’s BNB Chain has gained widespread adoption, and Coinbase’s Base recorded a 300% rise in transactions during the second quarter of 2024. This surge was largely driven by new decentralized applications (DApps) and memecoin activity.
Meanwhile, to compete with global crypto exchange leaders, around 40 Kraken employees are currently working on the Ink project. Kraken is also planning developer events, including a significant one in November at Devcon in Thailand. The company continues to innovate in various markets and explore potential products as it eyes an initial public offering (IPO). Earlier reports suggested that Kraken could conduct a final funding round before going public.
Also, it’s important to note that Kraken’s plans unfold amidst regulatory uncertainty. In 2023, the exchange settled charges with the U.S. Securities and Exchange Commission (SEC) regarding its staking services and has faced allegations related to unregistered broker activities.
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