Kraken Eyes Layer-2 Launch Following Coinbase’s Base Success

Kraken plots an Ethereum Layer-2 venture following Base’s success.

Kraken taking the billiard que and its his turn to play.
Created by Kornelija Poderskytė from DailyCoin
  • Kraken is reportedly planning to launch a Layer-2 blockchain.
  • The firm is seeking partners among blockchain technology firms.
  • The move builds on Coinbase’s recent success with Base.

In recent years, centralized crypto exchanges, including Binance and Coinbase, have ventured into the public blockchain arena as a means of diversifying revenue streams and extending products and services. In the latest instance, reports suggest Kraken is set to join this list.

Kraken Seeks Partner for Layer-2 Venture

Kraken is seeking a partner to help launch an Ethereum Layer-2 chain, according to a Tuesday, November 7 report from CoinDesk citing persons familiar with the matter.

Per the report, the blockchain technology firms being considered by Kraken include Polygon Labs, Matter Labs, and Nil Foundation. 

Kraken neither confirmed nor denied the report in response to a DailyCoin request for comment.

"We’re always looking to identify and solve for new industry challenges and opportunities. We don’t have anything further to share at this time," a company spokesperson asserted.

The firm recently posted a job opening for a “Senior Cryptography Engineer” with responsibilities including the design and implementation of Layer-2 solutions. 

Kraken’s Layer-2 plans follow the recent rapid rise of Coinbase’s Layer-2 protocol Base, highlighting that there is still room for more blockchains to thrive in the DeFi space. 

Can Kraken Emulate Base’s Rise?

According to L2Beat data at the time of writing, Base is the third largest Ethereum Layer-2 solution by TVL, with $578 million. At the same time, the network has generated over $4.9 million in revenue and attracted over 2.6 million users, according to TK Research’s Base Dune analytics dashboard

Base has achieved all of these within three months of its public launch. The network’s rapid rise has mainly been attributed to Coinbase’s reputation as a trusted name in the crypto space and the launch of novel projects on the network like Friend.tech.

As Coinbase did with Base, Kraken will likely leverage its brand appeal to attract users and projects to its planned Layer-2 chain.

On the Flipside

  • Unlike Coinbase, which opted to use Optimism‘s OP Stack for Base, the options being considered by Kraken suggest a leaning towards zero-knowledge rollups.
  • Blockchains incubated by exchanges often face intense centralization scrutiny.

Why This Matters

Kraken is one of the world’s largest crypto exchanges. The firm’s plan to launch a Layer-2 chain highlights the traction the ecosystem is getting and is likely to heat up competition in the space.

Read this to learn more about Coinbase’s Layer-2 venture:
Base Chain First Week Rundown: Adoption, Exploits, and Rugpulls

Gemini’s CTO is reportedly set to leave the company. Find out more:
Gemini Set To Lose CTO Amid Crypto Executive Exodus

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tags
Author
Okoya David

David Okoya is a crypto news reporter at DailyCoin based in Nigeria. He covers various topics related to the cryptocurrency industry, including exchanges, regulations, and price movements, and strives to bring fresh angles to breaking news. With experience as a freelance crypto news writer, David upholds the highest journalistic standards, telling complete stories and answering lingering questions whenever possible.