Crypto exchange Kraken may build its own Layer-2 blockchain.
Kraken could be the next major exchange to launch a layer-2 scale network. While unproven, speculation abounds!
Crypto exchange Kraken has been the subject of speculation since its job listing was released on Tuesday. According to the post, Kraken is looking for a senior cryptography engineer who will take on multiple responsibilities, including handling “the design and implementation of Layer 2 solutions.”
The mission statement also noted that the exchange is committed to developing and supporting new technologies that make cryptocurrency more scalable, secure and confidential. These include “Layer 2 technologies, zero-knowledge authentication and multi-party computation” among other on-chain authentication solutions.
Kraken Job Posting Hints at Upcoming Layer-2 Network Launch
Any “Layer 2” specification prompts the assumption that a Layer-2 network is enabled. According to sources familiar with the matter, Kraken is in talks with a number of industry players, such as Polygon, Matte Lab and the Neal Foundation, to build a layer-2 blockchain.
All three of these entities are working to develop and promote Ethereum Layer-2 solutions. Polygon is one of the leading layer-2 protocols that provide various solutions for Ethereum, such as Sidechain, Optimism and ZK Pack.
Matter Labs is the company behind ZK Sync, a Layer-2 scale solution that uses zero-knowledge (ZK) proofs to improve the scalability and privacy of Ethereum transactions. Neal Foundation is the developer of ZK technology; The company is working on zkOracle in collaboration with Lido Finance.
Crypto media outlets have reached out to Kraken, but the exchange has either confirmed or denied rumors of its launch of a Layer-2 network. A Kraken spokesperson said the company is always looking for ways to improve its products and services and expand into new markets, but has no specific announcements at this time.
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“We are always looking to identify and address new industry challenges and opportunities. We have nothing to share at this time.
Kraken is set to share more than 42,000 customer accounts with the Internal Revenue Service (IRS) this month, following a court order in June. In February, the US Securities and Exchange Commission (SEC) accused the exchange of failing to register its stock-as-a-service program as a security.
Kraken has denied the SEC's allegations, but has agreed to settle the matter with the federal agency and stop offering shares to US customers.
Layer-2 Solutions: Are They the Real Deal?
Crypto enthusiasts are divided over the news that major crypto exchange Kraken is considering building its own layer-2 network. Some argue that too many layer-2 solutions can lead to fragmentation, while others support potential mobility, which they believe provides more flexibility to users and developers.
Competition between different Layer-2 solutions can lead to better solutions and lower fees. Currently, Optimism, Arbitrum, zkSync and Starnet are upper layer-2 protocols.
In August, Coinbase Base, one of Kraken's biggest rivals, officially launched a layer-2 blockchain. Since its launch, Base Total Value Locked (TVL) has gained significant momentum, especially with the hype around social fi in recent months. In the year In the year As of November 2023, Base's TVL has exceeded $550 million driven by USDC creation.
However, there are growing concerns about fraud on Base. In recent months, scam projects like Swirlend and Magnet Finance have defrauded investors of millions of dollars. It is estimated that 500 projects on Base are involved in fraud or money laundering.
All Layer-2 solutions have different trade-offs between scalability, decentralization, and security. That means more Layer-2 solutions help achieve a better balance between scalability, decentralization and security.
Having more Layer-2 solutions gives users more choice. Users can choose the Layer-2 solution that best meets their needs, based on their priorities of scalability, decentralization, and security.
