What is Ink: Kraken’s layer-2 DeFi bridge?

What is Kraken’s Ink blockchain?

As someone who has been closely following the blockchain revolution, I find myself particularly intrigued by the upcoming launch of Ink. With my background in tech and finance, I can appreciate the strategic economic model Kraken has put together. The sequencer revenue model, as demonstrated by Coinbase’s success, seems like a promising approach for long-term growth.

Kraken’s Ink project is being developed as a bridge at layer-2 to streamline decentralized finance (DeFi) by increasing transaction speed, reducing costs, and boosting flexibility. The beta version, or Testnet, will debut during DevCon Bangkok from November 12-15, 2024, with the main network set for release in the first quarter of 2025.

Smoothly combining centralized and decentralized platforms, Ink by Kraken offers users essential tools and resources, addressing typical difficulties that arise in such environments. This solution functions as a layer-2 (off-chain) solution on Ethereum, reducing strain on the main Ethereum chain (layer-1).

L2 solutions” is a term used to describe advanced techniques constructed on underlying blockchains (often called L1 chains) with the aim of enhancing their features like scalability and privacy. These techniques divert transaction processing away from the L1 chain, utilizing it only for finalizing transactions. Notable examples of such methods are state channels, sidechains, optimistic rollups, and zero-knowledge rollups.

Built using the open-source, MIT-licensed OP Stack foundation, Ink is designed to work seamlessly within the Ethereum network. Ink is set to be an essential part of the Optimism Superchain, a unified system of L2 blockchain networks that share a common development platform, security measures, and interconnectivity features such as bridging and communication.

Using Ink, you can tap into Ethereum’s proven security as you engage in a system that fosters Ethereum’s scalability. The Optimism Superchain will foster compatibility within its ecosystem and beyond, making it simple for liquidity to seamlessly transition between the chains constituting the Superchain.

How is Ink different from other L2 solutions?

Ink will bridge the sometimes daunting world of DeFi and the familiar environment of centralized crypto exchanges. For beginners, it will make the process of “going onchain” much more approachable. By easing consumers into DeFi, it seeks to lessen the unease with which DeFi is frequently associated.

Ink, a blockchain supported by exchanges and specifically tailored for Decentralized Finance (DeFi), strives to streamline user experiences and broaden access to decentralized finance solutions. By shifting transaction processing tasks away from the primary blockchain, Ink aspires to boost efficiency and scalability within the DeFi sector.

Using Ink, Kraken aspires to infuse a sense of institutional trust into the realm of decentralization. This strategy transcends being just another L2 solution; it seamlessly merges the pros and cons of centralized and decentralized systems. By minimizing or eradicating the hurdles that have previously hindered transitions, Ink could potentially make it smooth for users to navigate between these two domains.

What makes Ink unique among L2 bridges is its emphasis on security, a key aspect in decentralized finance (DeFi). From the get-go, Ink aims to provide one-second block times and further work towards sub-second blocks for speed. This focus on both robust security and swift transaction processing sets Ink apart.

Did you know? In Q1 2024, daily active addresses in Optimism reached 89,000, a 23% increase from the previous quarter. Daily transactions in Optimism reached 470,000, which is a 39% jump from the previous quarter.

What makes interoperability a key feature of Ink?

Ink emphasizes effortless asset transfer between various blockchains due to its focus on cross-chain compatibility. This unique trait makes Ink stand out as a flexible platform in the Decentralized Finance (DeFi) world, allowing smooth interactions across different chains.

On the foundation of the Optimistic Rollup (OP Stack), Ink leverages Ethereum‘s robust security and contributes value to the network of L2 solutions within the Optimism Superchain. This unified network of chains, operating as one, enhances the overall performance of the entire Ethereum ecosystem, thereby expanding the possibilities for Decentralized Applications (DApps) to function effectively.

Utilizing ink can significantly improve the functionality of Decentralized Applications (DApps) and protocols within the Superchain. This is achieved by automating various tasks and optimizing workflows, making it easier for these applications to transition seamlessly into on-chain operations.

With its focus on enabling communication between different blockchains, Ink empowers users to tap into an expanded selection of decentralized applications (DApps) and resources from various networks.

Have you heard? The Asia-Pacific area is seeing exceptionally fast expansion in the market for blockchain interoperability. This boom can be attributed to the broad acceptance and usage of blockchain technology, as well as robust government backing in nations such as China, Japan, and South Korea. The region is currently experiencing a remarkable yearly growth rate, with a compound annual growth rate (CAGR) surpassing 65%.

What will be the economic model of Ink?

The platform called Ink boasts a carefully designed economic structure. It’s planned for release by Kraken, adopting a sequencer revenue model – a strategy that has been successful, as demonstrated by Coinbase, as reported by Bloomberg.

Using Ink, Kraken has strategically designed an economic blueprint that promotes growth within the ecosystem over a prolonged period. In this role, Kraken serves as Ink’s transaction organizer, orchestrating transactions in a group (roll-up) before forwarding them to Ethereum and collecting earnings from the service. For instance, Coinbase amassed $53 million in sequencer revenue with Base during the second quarter of 2024 alone.

As I delve deeper into the project, it’s clear that Ink is not embarking on this journey by itself. Instead, it launches with over a dozen Decentralized Applications (DApps) that are set to go live shortly. These innovative applications have been meticulously designed for sectors such as advanced financing platforms and real-world asset management, providing a solid foundation for Ink’s growth and development.

How can you get started with Ink?

You can get involved with Ink by minting a commemorative NFT, attending DevJam in Bangkok, or engaging with the community on Discord and Telegram.

Here’s how you can dive into the Ink blockchain: 

• Minting a commemorative NFT: Collaborate with Optimism to mint an exclusive NFT and become an early adopter.
• Attending Ink DevJam in Bangkok: Join the DevJam event at DevCon7 in Bangkok from Nov. 12-15, 2024. 
• Engaging with the community: Connect with the Ink community on Discord and Telegram .

Did you know? As of Nov. 4, 2024, with a total value locked (TVL) of $2.43 billion, Base currently holds the largest market share among all L2 chains. The TVL of all L2 chains collectively amounts to 9.06 billion dollars.

How can you benefit from the launch of Ink as an end user?

With Ink, developers can work in a setting offering tools, assistance, and potential funding sources. This platform allows users to connect their blockchain initiatives with Ink. Through the use of consolidation, automation, and abstraction methods, Ink assists developers in crafting user-focused experiences.

For those who are users of our platform, it’s wise to get ready for possible future airdrops of the Ink token. Participating in the official Discord community could be beneficial in such cases. Also, Ink has set up a faucet where you can acquire Ether (ETH) easily.

With Ink, developers can create applications that help users access opportunities onchain. They can get into an ecosystem of other DeFi-focused builders, where they can leverage the communities and composability to bring their DeFi ideas to life. 

For developers, the opportunity to join the Ink Apprentice Developer Position is available. To qualify, showcase your expertise by proving that you’ve successfully deployed a smart contract on any of these blockchain networks: Ethereum, Optimism, Binance Smart Chain (Base), Arbitrum, Polygon, or BNB Chain.

As an alternative, you may become eligible if your GitHub account has been active for at least a year. The verification process can be completed on the Guild’s website.