Kraken neither confirmed nor dispelled the rumor.
Reports suggesting that US-based crypto exchange Kraken is seeking partnerships to enable it to develop its own Layer 2 network solution have emerged.
Per the report, the exchange is considering a partnership with Polygon, which is noted for its Ethereum scaling solutions, to build its Layer 2 network. Matter Labs and Nil Foundation are also being appraised for the role. According to unnamed sources. Kraken will partner with one of the companies and use their technology as the basis for its Layer 2 solutions.
Asked about the development, a Kraken spokesperson stated that the exchange had no new information to share with the public at the time. “We’re always looking to identify and solve for new industry challenges and opportunities,” they concluded.
Kraken Remains Mute about Layer 2 Network Plans
What is interesting is that Kraken neither confirmed nor dispelled the rumor. Instead, the exchange is looking to employ a Senior Cryptography Engineer.
According to a job advert posted on the company page, such an individual must possess knowledge of modern cryptography including zero-knowledge proofs, and may be required to design and implement Layer 2 solutions. This further suggests that Kraken may indeed be considering a Layer 2 network to enhance its services.
If proven to be true, Kraken will not be the first crypto firm to do so. The expansion into blockchain development represents a broader trend among cryptocurrency firms looking to diversify their offerings. Kraken will be following Coinbase, who launched its Base network in August.
Base is built from the OP Stack offered by the OP Labs team behind Optimism. Unlike the Ethereum mainnet, the network promises enhanced transactional throughput and lower fees. Thus, even before its public launch, the Base network amassed $139 million in deposits. Already, the network has surpassed Optimism and Arbitrum and sits third in total valued locked (TVL) in the L2 sector. Kraken will also be hoping to augment its revenue through this means.
A Variety of Reactions
Meanwhile, there have been diverse reactions from the crypto community about Kraken’s potential interest in a Layer 2 solution. While some consider the move worthwhile, others claim it is unnecessary. One X user noted that existing L2 networks are already “fragmenting liquidity” and another is not needed.
Whatever the case, Kraken’s final decision will significantly impact the exchange’s ability to scale its operations and compete with rivals like Coinbase.
An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
