Kraken, one of the oldest cryptocurrency exchanges, has announced plans to launch its own blockchain platform, known as “Ink,” early next year. The blockchain is designed to support a range of decentralized applications (dApps) aimed at facilitating token trading, borrowing, and lending without relying on intermediaries. This move marks Kraken’s entry into the growing space of proprietary blockchains that many cryptocurrency exchanges are leveraging to boost user engagement and increase revenues.
Innovative Blockchain Inspired by Decentralized Finance Success
Ink’s development draws inspiration from the success of other decentralized finance (DeFi) platforms, notably Coinbase Global Inc.’s Base, which has rapidly gained prominence since its launch over a year ago. The platform has played a crucial role in Coinbase’s growth, demonstrating a 300% rise in transactions during the second quarter, driven by new app launches and the popularity of meme coins. Kraken appears to be following a similar trajectory with Ink, hoping to replicate this success in the DeFi space.
The head of the Ink project, Andrew Koller, revealed that a testnet for developers to experiment with Ink applications is expected to launch later this year. The full platform will be available to both retail and institutional users in the first quarter of next year. Kraken’s blockchain, however, will not feature its own native token, as the company is focusing on providing a streamlined and cost-efficient DeFi experience for users. This contrasts with platforms like Binance’s BNB Chain, which utilize native tokens as part of their ecosystems.
Streamlining DeFi for Mass Adoption
One of the key objectives behind Ink is to simplify the often complex DeFi process, making it more accessible to users. The platform will focus on user-friendly interfaces, with the integration of Ink applications directly into the Kraken Wallet app. Koller emphasized that the goal is to make the platform as intuitive as possible, comparing the intended ease of use to the seamless experience provided by Apple products.
The blockchain will initially launch with more than a dozen decentralized applications, including exchanges and aggregators. Over time, Kraken plans to expand the range of dApps available on the platform, with future updates potentially incorporating real-world assets and more advanced lending applications. The integration of these features is aimed at providing users with a comprehensive decentralized finance ecosystem while minimizing the technical barriers often associated with DeFi.
Decentralization and Revenue Opportunities
At the outset, Kraken will operate as the chain’s sequencer, a role that allows it to oversee transactions and generate revenue. This model mirrors the approach taken by Coinbase with its Base platform, which reported $53 million in sequencer revenue in the second quarter of this year. However, Kraken’s long-term vision for Ink includes decentralizing the sequencer function, allowing multiple stakeholders to take on this responsibility in a more distributed manner.
The company has dedicated around 40 employees to the Ink project and is actively preparing for several developer-focused events, including an upcoming appearance at Devcon in Thailand this November. Kraken’s push into the blockchain space comes as the company explores new markets and expands its product offerings. This diversification has fueled speculation about a potential initial public offering (IPO), a possibility hinted at earlier this year in reports by Bloomberg.
Aiming to Foster Greater Integration Between Centralized and Decentralized Systems
Koller also noted that Ink’s broader goal is to facilitate seamless navigation between centralized and decentralized financial systems, fostering a more integrated experience for users. The platform aims to strike a balance between the familiarity of traditional financial interfaces and the innovative possibilities offered by decentralized technologies.
As Kraken moves forward with the Ink blockchain, the company is positioning itself to be a key player in the rapidly evolving DeFi market. The launch of Ink reflects a broader trend among cryptocurrency exchanges, where platforms are increasingly looking to proprietary blockchains as a way to enhance user engagement, drive revenue, and contribute to the growth of decentralized finance.