What is Kraken building with Ink? Can it stand out in L2?

Author: Kazu Umemoto, Bankless; Translator: Deng Tong, Golden Finance

One of the biggest trends in DeFi last year was the steady rise of Coinbase’s Base network. But after soaring to the top of L2 in total locked value (TVL), Base now has a very clear goal.

Kraken is ready to join the fight.

The centralized exchange is set to release a new rollup “Ink” based on the OP Stack. Following the hype of Unichain, Kraken is now stepping into the growing Superchain ecosystem.

Let’s take a deep dive into what Kraken is building with Ink, why they chose Superchain, and how Ink plans to stand out in the increasingly crowded Rollup ecosystem.

1. The Vision of 'Ink'

Like Coinbase, Kraken offers a suite of DeFi tools, including staking and spot trading, as well as self-custodial wallets. The natural next step for both companies is to encourage users to move to the chain.

That's the plan for Ink. Kraken aims to expand its own L2 and leverage the trust they have built with their existing customer base. Just as Coinbase has tried to cleverly attract users to its on-chain trading products through tight integration with Base, Ink may become the preferred venue for Kraken traders.

Where Ink goes will depend on whether Kraken succeeds in attracting the best developers in the field to bet on the fledgling L2. Ink plans to launch its testnet at Devcon in Bangkok later this year. The mainnet is currently scheduled to launch in early Q1.

Will there be a token airdrop?

Well,Now the first thing you might want to know is whether there will be an Ink airdrop opportunity. Currently, just like Base, the answer is no.

Ink founder Andrew Koller said there are no plans for an Ink token at this time.

In this regulatory environment, this is not surprising. Kraken has avoided launching tokens that could be challenged by regulators. While investors still hope that their on-chain activity on Base will one day earn them a token allocation, similar to Ink, the company's official line is that there are no current plans for a token.

Is Coinbase vs. Coinbase Kraken a competitive relationship?

On the surface, Kraken and Coinbase appear to be aligned, both committed to the common goal of bringing as many users as possible onto the chain. However, they are still direct competitors, and Kraken's move into the L2 space could easily be interpreted as a strategic response to the breakout success of Coinbase Base.

Kraken began developing its own chain about a year ago, around the same time as Base launched, which shows that they understand the opportunity and urgency.

Nevertheless, the two blockchains still benefit from each other. Optimism co-founder Ben Jones noted that the goal of Superchain is to act like the U.S. interstate highway system, promoting growth and positive economic impact for all participants by allowing liquidity to flow freely between blockchains. What’s good for Base is also good for Ink, and vice versa.

The introduction of more exchange-supported L2s may help promote healthy competition in the decentralization process. Initially, Ink’s team will act as the network’s only on-chain sorter, but they plan to gradually decentralize the network’s operations. Meanwhile, more than a year after its launch, Coinbase officially announced that fault proofs will be live on Base later this month. This marks a major step forward, but also shows that achieving full decentralization is a gradual process.

Fourth, has Superchain won?

With Kraken joining Superchain, optimism about the ecosystem is soaring. Superchain currently processes about 7 million transactions per day, almost half of all L2 activity. With the upcoming launch of Unichain and the continued development of the ecosystem, this number is expected to rise.

Another key reason to be bullish on the Superchain ecosystem is the seamless SuperchainERC20 token standard. While it may seem small at first glance, this new standard solves a significant problem when trying to transfer liquidity between L2 chains.

With the SuperchainERC20 token standard, users can now easily transfer liquidity between chains within the Superchain ecosystem without bridging back and forth. This solution significantly reduces Gas costs and eliminates security issues associated with traditional bridges, making cross-chain liquidity transfers more efficient and secure.

Kraken has pledged to share part of Ink's network revenue with the Optimism Collective and support the core development of the OP Stack. The participation of major players such as Kraken and Coinbase is a big win for Superchain, further solidifying its position as the preferred infrastructure for DeFi users.

V. Ink's Value

L2 is becoming increasingly crowded; there is no dispute about it.

For those who worry that Rollup-centric expansion is undermining Ethereum's advantages, another L2 launch may serve as another data point to support their suspicions. But for those who believe that we are still in the early stages of a long journey to bring the world on-chain, a trusted exchange with a large-scale distribution and a major public bet on decentralized finance is huge.

With more blockchains joining, Superchain is becoming a one-stop shop for DeFi, and with Kraken's 10 million existing customers, Ink provides a huge opportunity for our space.