CoinDesk Report:
Author: Kazu Umemoto, Bankless; Translation: Deng Tong
One of the biggest trends in DeFi last year was the steady rise of Coinbase’s Base network. But after reaching the peak of its total value locked (TVL) skyrocketing to L2, Base now has a very clear goal.
Kraken is ready to join the battle.
The centralized exchange will launch a new Rollup L2 called “Ink” based on the OP Stack. Following the grand promotion of Unichain, Kraken is now stepping into the rapidly developing Superchain ecosystem.
Let’s delve into what Kraken is building with Ink, why they chose Superchain, and how Ink plans to stand out in the increasingly crowded Rollup ecosystem.
I. The Vision of Ink
Like Coinbase, Kraken offers a set of DeFi tools including staking and spot trading, as well as self-custody wallets. The natural next step for both companies is to encourage users to move to the chain.
This is where Ink comes in. Kraken’s goal is to expand its L2 and leverage the trust they have built with their existing customer base. Just as Coinbase cleverly attracted users to use its on-chain trading products through close integration with Base, Ink may become the preferred venue for Kraken traders.
The direction of Ink will depend on whether Kraken is successful in attracting the best developers in the field to bet on the nascent L2. Ink plans to launch its testnet at Devcon in Bangkok later this year. The mainnet is currently scheduled to launch in the first quarter of 2025.
II. Will there be token airdrops?
Well, the first thing you might want to know now is whether there will be an opportunity for Ink airdrops. Currently, just like Base, the answer is no.
Andrew Koller, founder of Ink, stated that there are currently no plans for Ink tokens.
Given the regulatory environment, this is not surprising. Kraken avoids issuing tokens that could be challenged by regulatory agencies. Although investors still hope that their on-chain activities on Base will one day earn them token distributions, similar to Ink, the official statement from the company is that there are currently no token plans.
III. Are Coinbase and Kraken competitors?
On the surface, Kraken and Coinbase seem aligned in their shared goal of bringing as many users as possible onto the chain. However, they are still direct competitors, and Kraken’s foray into the L2 space can be seen as a strategic response to Coinbase Base’s breakthrough success.
Kraken started developing its own chain about a year ago, around the same time as the launch of Base, which indicates their understanding of the opportunity and urgency.
Nevertheless, these two blockchains still benefit each other. Ben Jones, co-founder of Optimism, pointed out that the goal of Superchain is to promote growth and positive economic impact for all participants by allowing liquidity to flow freely between blockchains, much like the interstate highway system in the United States. What benefits Base also benefits Ink, and vice versa.
Introducing more exchange-supported L2s can help promote healthy competition in the decentralization process.
Initially, the Ink team will act as the sole on-chain sequencer of the network, but they plan to gradually decentralize the operation of the network. Meanwhile, after more than a year of launch, Coinbase officially announced that fault tolerance will go live on Base later this month. This marks an important step forward, but also indicates that achieving full decentralization is a gradual process.
IV. Has Superchain won?
With Kraken joining Superchain, optimism about the ecosystem is soaring.
Superchain currently processes about 7 million transactions per day, nearly half of all L2 activity. This number is expected to rise with the upcoming launch of Unichain and the continued development of the ecosystem.
Another key reason for the positive outlook on the Superchain ecosystem is the seamless Superchain ERC20 token standard.
Although it may seem small at first glance, this new standard addresses significant issues when trying to transfer liquidity between L2 chains.
With the Superchain ERC20 token standard, users can now easily transfer liquidity between chains within the Superchain ecosystem without the need for back-and-forth bridging. 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 committed to sharing part of the network revenue of Ink with Optimism Collective and supporting the core development of the OP Stack. The participation of major players like Kraken and Coinbase is a huge victory for Superchain, further solidifying its position as the preferred infrastructure for DeFi users.
V. The Value of Ink
L2 is becoming increasingly crowded; that is indisputable.
For those who are concerned that Rollup-centric scalability is eroding Ethereum’s advantage, the launch of another L2 may be another data point supporting their doubts. However, for those who believe that we are still in the early stages of bringing the world onto the chain, a trusted exchange with a large-scale distribution and a significant 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 presents a tremendous opportunity for our field.