Kraken Explores Partnership with Leading Blockchain Firms to Launch Layer 2 Network

By 0xK2 11/7/23 2:42 AM

Kraken, one of the leading cryptocurrency exchanges in the United States, is reportedly considering collaborating with several prominent blockchain technology firms to launch its own Layer 2 network. This development follows in the footsteps of its rival, Coinbase, which unveiled its own Layer 2 network earlier this year.

According to Coindesk, Kraken is exploring partnerships with blockchain technology companies, including Polygon, Matter Labs, and Nil Foundation, to harness their technology as the foundation for their forthcoming Layer 2 network. While these discussions are currently in progress, no official announcements have been made, and the companies involved remain tight-lipped about the potential collaboration.

Layer 2 solutions are gaining traction in the cryptocurrency industry due to their ability to enhance scalability and reduce transaction costs on the underlying blockchain, such as Ethereum. By launching its own Layer 2 network, Kraken aims to provide faster and more cost-effective transactions for its users while reducing the load on the Ethereum network.

A spokesperson for Kraken, when asked for comment, stated, “We’re always looking to identify and solve new industry challenges and opportunities. We don’t have anything further to share at this time.” This statement maintains the veil of secrecy around the project but indicates that Kraken is actively exploring innovations in the blockchain space.

Kraken’s move mirrors a broader trend in the cryptocurrency industry, where major companies with established brands and customer followings are increasingly involved in blockchain development. These companies view blockchain technology as a potential source of new revenue and an extension of their current operations.

Earlier this year, Coinbase made a significant stride in this direction by introducing its own Layer 2 network, Base. Base utilizes the OP Stack, developed by the OP Labs team, the same team responsible for building Optimism, the second-largest Layer 2 network on the Ethereum blockchain. This initiative has been well-received by the crypto community and has put Coinbase at the forefront of Layer 2 adoption.

The exploration of partnerships with blockchain technology firms, such as Polygon, Matter Labs, and Nil Foundation, suggests that Kraken is committed to staying competitive and delivering innovative solutions to its user base. By investing in a Layer 2 network, Kraken can potentially improve the speed and efficiency of cryptocurrency transactions, offering its customers an enhanced trading experience.

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