Kraken Eyes Layer-2 Options: Is Cardano a Prime Candidate?

Explore Kraken’s exploration of Layer-2 network options, including a potential partnership with Cardano.

Krakens tenticle is holding a Cardano coin
Created by Kornelija Poderskytė from DailyCoin
  • Kraken considers various options for Layer-2 network development.
  • Charles Hoskinson proposes Cardano’s expertise for Kraken’s Layer-2 network.
  • Kraken is in talks with Polygon for Layer-2 collaboration.

After the significant success of Coinbase’s Base protocol, Kraken seeks to launch its own. Exploring the potential of Layer-2s, the exchange wants to create a scalable and cost-effective network. Cardano, led by Charles Hoskinson, offered its expertise. However, Kraken is considering other candidates as well. 

Why Cardano Founder Wants to Help Kraken

On November 12, via a social media post, Charles Hoskinson extended a proposal to Kraken. Cardano founder offered to share his expertise to help Kraken build its Layer-2 network, similar to Coinbase’s Base network. 

For Hoskinson, the motivation behind the proposal is clear; it represents an opportunity to enhance visibility for himself and Cardano. By aligning with Kraken, Hoskinson aims to elevate Cardano’s profile in the blockchain arena.

On the other hand, Kraken’s interest in a Layer-2 network follows the success of Coinbase’s Base. The Base chain has demonstrated strong performance and significant growth since its inception. In the months since its launch, Base even surpassed Solana in Total Value Locked (TVL). 

Moreover, a Layer-2 network represents an opportunity to capitalize on the benefits offered by Ethereum’s extensive ecosystem while benefitting from lower transaction costs and faster transaction times. 

Will Kraken Pick Cardano? 

Kraken is actively considering several potential partners for developing its Layer-2 scaling solution, including Polygon, Matter Labs, and Nil Foundation. Each brings unique strengths to the table:

Polygon Labs: Known for its Ethereum scaling solutions, Polygon Labs has developed technologies like the Polygon PoS network and Polygon zkEVM. Currently, its Polygon network is the largest Ethereum level 2 scaling solution in the market. Moreover, the network is known for its extensive partnerships with crypto and traditional firms. 

Matter Labs: As the developer behind the zkSync Layer-2 network, Matter Labs specializes in zero-knowledge proof technology, which is crucial for scalability and privacy on blockchain networks.

Nil Foundation: Nil Foundation is a pioneer in zero-knowledge technology, focusing on zkProofs and trustless data management. Their solutions aim to facilitate scalable, trustless computing and data access organized in a flexible toolchain secured by Ethereum.

Cardano: Led by Charles Hoskinson, Cardano is renowned for its rigorous scientific approach to blockchain development. It stands out for its Ouroboros Proof-of-Stake protocol, which offers enhanced security and sustainability. Moreover, Cardano recently veered into Layer-2 solutions, particularly the Hydra protocol. This expertise positions Cardano as a compelling choice for Kraken’s Layer-2 development. 

On the Flipside

  • Kraken has not yet indicated it is considering Cardano as a potential partner in Layer 2 solutions. 
  • The chosen partner will significantly influence Kraken’s market positioning and its ability to compete with other top exchanges.

Why This Matters

The decision on Kraken’s Layer-2 partner will impact both the exchange and whichever team Kraken opts to build with. If the exchange can replicate Coinbase’s Base success, it will influence the market position of both parties. 

Read more about the blockchain that inspired Kraken’s Layer-2 vision: 
Base Chain: What’s So Special About Coinbase’s Layer-2 Blockchain?

Read more about new global rules on crypto: 
47 Countries Agree on Crypto Taxes: Here’s What it Means

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.

David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.