(Bloomberg) -- One of world’s oldest crypto exchanges, Kraken, plans to launch a blockchain early next year for decentralized applications that allow for trading, borrowing and lending of tokens without intermediaries.
Called Ink, the new digital ledger will use similar technology to Coinbase Global Inc.’s Base. Since its debut more than a year ago, Base has become one of the largest DeFi platforms. A so-called testnet, where developers will be able to try apps for Ink, will start later this year, and the blockchain is expected to become open to retail and institutional users in the first quarter, Andrew Koller, founder of Ink, said in an interview.
Crypto exchanges have been launching their own blockchains after seeing them help drive revenue and user growth at Binance, the world’s biggest digital-asset exchange. Binance’s BNB Chain and related token have become among the most popular globally. Coinbase’s foray into the sector has proved successful as well, with Base seeing 300% sequential growth in the number of transactions in the second quarter, driven by app and memecoin launches. Kraken doesn’t plan to issue its own token, Koller said.
While DeFi apps have been around for years, they’ve been seen as too complex for the average person. Kraken is trying to simplify the experience and to make it cheaper and more intuitive to use DeFi to earn yield and for other functions. Ink apps will be available through the Kraken Wallet app, Koller said.
“It’s a very easy-to-use, Apple-esque experience,” Koller said. “Over time, our users will have these two centralized and decentralized ecosystems playing with each other. We want you to feel that you are doing something familiar.”
Over a dozen apps, such as decentralized exchanges and aggregators, will be available on Ink at its debut, Koller said. Eventually, the chain could become home to real-world assets and advanced lending apps as well, he said. Since its debut, Base has been flooded with memecoins.
Initially, Kraken plans to be the chain’s sequencer, making money from organizing and managing transactions on the network, but the function will eventually be decentralized, and shared among multiple parties, Koller said. In the second quarter, Coinbase booked $53 million in sequencer revenue, according to its shareholder letter.
Across Kraken, around 40 people are working on Ink, Koller said. The company is already planning events for developers, including at Devcon in Thailand in November, he said.
Kraken, which was founded in San Francisco in 2011, has been expanding into new product areas and markets as it continues to mull a potential initial public offering. Earlier this year, Bloomberg reported the private firm was considering a final funding round ahead of an IPO.
Like many crypto companies, Kraken’s future may hinge on whether US crypto policies are modified after the upcoming US elections. Last year, the US Securities and Exchange Commission charged Kraken with operating and unregistered broker, dealer, exchange and clearing agency. In February 2023, Kraken settled separate charges with the SEC over its staking business.
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