Unpacking Kraken's New Superchain L2 'Ink'

One of the biggest trends in DeFi this past year has been the steady rise of Coinbase's Base network. But after surging into the pole position for L2s by total value locked (TVL), Base now has a pretty clear target on its back.

Kraken is ready to join the fray.

The centralized exchange is set to release a new rollup, "Ink," built on the OP Stack. Following the much-hyped announcement of Unichain, Kraken is now stepping into the growing Superchain ecosystem.

Let's dig into what Kraken is building with Ink, why they picked the Superchain, and how Ink plans to stand out in an increasingly jam-packed rollup ecosystem. 👇

🔭 The Vision for 'Ink'

Like Coinbase, Kraken offers a suite of DeFi tools, including staking and spot trading, as well as a self-custody wallet. The natural next step for both companies has been encouraging their users to move onchain. 

That's the plan with Ink. Kraken aims to scale their own L2 and leverage the trust they've built with their existing customer base. In the same way Coinbase has sought to subtly entice users of their exchange product onchain through tight integrations with Base, Ink will likely become the preferred venue for Kraken traders.

Where Ink goes will depend on how successful Kraken is at enticing the space's best developers to bet on the fledgling L2. Ink plans to launch its testnet at Devcon in Bangkok later this year. Mainnet launch is currently set for early Q1 2025.

🤑 Will There Be a Token?

Okay, now the first thing you're probably wondering is if there is an Ink airdrop opportunity. For now, much like Base, the answer is no.

According to Ink founder Andrew Koller, there are no plans for an Ink token at this time.

In this regulatory environment, this isn't too surprising. Kraken is steering clear of releasing a token that could potentially be challenged by regulators. While airdrop farmers are still hoping that their onchain activities on Base will one day earn them token allocations, similar to Ink, the official company line is that there are no immediate plans for a token.

🥊 Coinbase vs. Kraken: A Rivalry?

On the surface, Kraken and Coinbase appear to be aligned, both working toward the shared goal of bringing as many users on-chain as possible. However, they remain direct competitors, and Kraken's move into the L2 space can easily be interpreted as a strategic response to the breakout success of Coinbase's Base. 

Kraken started developing its own chain about a year ago, around the same time Base launched, indicating they understood the opportunity and urgency.

Still, these two chains benefit each other. Ben Jones, co-founder of Optimism, tells Bankless that the Superchain aims to be like the U.S. interstate highway system—fostering growth and positive economic impacts for all participants by allowing liquidity to move freely between chains. What benefits Base also benefits Ink, and vice versa.

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Bringing in more exchange-backed L2s will likely serve to foster healthy competition in pushing toward decentralization. Initially, Ink's team will act as the sole on-chain sequencer for the network, but they plan to progressively decentralize the network's operations. Meanwhile, more than a year after launch Coinbase has officially announced that fault proofs will be going live on Base later this month. This marks a significant step forward, but it also shows that reaching full decentralization is a gradual process.

🏆 Is the Superchain Winning?

With Kraken joining the Superchain, optimism around the ecosystem is soaring.  The Superchain currently handles around 7 million daily transactions, nearly half of all L2 activity. This number is expected to rise with the upcoming launch of Unichain and the continued growth of the ecosystem. 

Another key reason to be bullish on the Superchain ecosystem is the seamless SuperchainERC20 token standard. While it might seem minor at first, this new standard addresses significant issues when trying to move liquidity between L2 chains. 

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

Kraken has committed to sharing a portion of Ink’s network revenue with the Optimism Collective and supporting the core development of the OP Stack. The participation of major players like Kraken and Coinbase is a huge win for the Superchain, further solidifying its position as the go-to infrastructure for DeFi users. 

Proving Its Worth

The L2 space is getting crowded; there's no argument about that.

For those concerned that rollup-centric scaling is watering down Ethereum's advantages, another L2 launch will likely serve as yet another data point backing their skepticism. But for those who believe that we're still early in a long journey to bring the world onchain, a trusted exchange with massive distribution making a major public bet on decentralized finance is huge.

As more chains join, the Superchain is becoming a one-stop shop for DeFi, and with Kraken's 10 million existing customers, Ink offers a massive onboarding opportunity for our space.