- Kraken is looking to replicate Coinbase’s success with the Base blockchain by creating its own Ethereum rollup.
- It joins Sony, Uniswap and World in the “Superchain” Optimism.
Kraken, one of the largest crypto exchanges in the United States, is building its own blockchain, the company announced Thursday.
This blockchain, Ink, will be an Ethereum rollup – a blockchain built on Ethereum that offers faster and cheaper transactions.
With Ink, Kraken becomes the latest exchange to offer its millions of customers a way to conduct business “on-chain.”
Most people who own and trade cryptocurrencies rarely interact directly with blockchain-based applications. Instead, they let centralized exchanges store and trade cryptocurrencies on their behalf.
The practice is an ironic twist for an industry built around technology intended to eliminate middlemen such as banks and brokerage firms.
Although long viewed with suspicion by crypto diehards, centralized exchanges have attempted to demonstrate their commitment to the principles of crypto, taking a combative stance against U.S. regulators and helping customers access the decentralized world via their own self-custodial wallets and blockchains.
With Ink, Kraken follows in the footsteps of Coinbase. This exchange became the first to develop its own Ethereum rollup when Base launched in June 2023.
Base has enjoyed tremendous success. Along with other “payments-related revenue,” the cumulative generated more than $100 million for Coinbase in the first half of this year, or about 3.5% of the exchange’s total revenue, according to the latest quarterly report from the Company. This month, its DeFi ecosystem became the largest among Ethereum rollups, surpassing longtime leader Arbitrum.
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Like Base, Ink will be built using code from Optimism, an early rollup developer who shares the technology with others who, in turn, contribute to its continued development.
Optimism chains account for almost half of the transactions among Ethereum’s 100+ rollups. Companies developing rollups using Optimism code include Sony, Uniswap, and Sam Altman-backed eye-scanning World (formerly known as Worldcoin).
While the proliferation of rollups has fragmented liquidity on Ethereum, Optimism plans to introduce a new token standard in 2025 that will enable interoperability between blockchains using its code.
“Ink will support SuperchainERC20 at launch, allowing users to easily navigate the Superchain ecosystem and setting the stage for more seamless interactions between Ink and other OP chains,” Kraken said in a statement.
Kraken claims over 10 million users worldwide. It plans to release an Ink testnet later this year and a final version on Ethereum in 2025.
Aleks Gilbert is a DeFi correspondent based in New York. You can contact him at aleks@dlnews.com.
