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Kraken’s Journey into Layer-2 Blockchain Networks

Kraken, one of the United States’ most prominent cryptocurrency exchanges, is making waves in the industry by seeking a partner to help build its very own layer-2 blockchain network.  

November 7, 2023 at 1:00 pm

Updated November  7, 2023 at 1:00 pm

Kraken’s Journey Into Layer-2 Blockchain Networks
Kraken’s Journey Into Layer-2 Blockchain Networks

What is a Layer-2 Blockchain Network?

A layer-2 blockchain network serves as a secondary framework that operates on top of an existing or “base” blockchain. The primary aim of layer-2 networks is to enhance the scalability and efficiency of the underlying blockchain. In Kraken’s case, the base blockchain in question is Ethereum, a blockchain wellknown for its role in supporting decentralized finance (DeFi) applications. Nevertheless, Ethereum has faced criticism for its scalability constraints, making the development of layer-2 solutions a compelling necessity.

Why is Kraken Building a Layer-2 Network?

Kraken’s decision to enter the realm of layer-2 blockchain networks is underpinned by a myriad of factors. Firstly, scalability is paramount. The exchange handles millions of daily trades, and to meet the surging demand, it requires a scalable solution that can accommodate this growth.

Secondly, Kraken is determined to alleviate the transaction costs on its platform. Layer-2 networks excel in this area by processing transactions off-chain, thus reducing transaction fees, which is a win-win for both the exchange and its users.

Thirdly, security is a priority for Kraken. Layer-2 networks offer an opportunity to enhance security by employing different mechanisms compared to the base blockchain. This diversity of security measures can bolster the exchange’s overall resilience against threats.

Which Partners are in the Running?

According to sources, Kraken is exploring potential partnerships with several leading blockchain technology firms to power its layer-2 network. The frontrunners include Polygon, Matter Labs, and the Nil Foundation, although the conversation is ongoing, and further participants might emerge.

Polygon: Renowned for its Ethereum scaling solutions, Polygon has made significant strides in the world of layer-2 technology, including the Polygon PoS network and the Polygon zkEVM.

Matter Labs: The brains behind the zkSync layer-2 network, Matter Labs is another strong candidate. Their technology offers a compelling foundation for Kraken’s ambitions.

Nil Foundation: Developers of the StarkNet layer-2 network, Nil Foundation’s expertise could provide Kraken with the infrastructure it needs for a successful launch.

What’s Next for Kraken?

While Kraken has not officially disclosed when its layer-2 network will debut, it’s evident that the exchange is in the early stages of development. This undertaking represents a significant step forward for Kraken and, if successful, could have far-reaching implications for the cryptocurrency industry.


Kraken’s foray into building a layer-2 blockchain network marks a significant milestone in the world of cryptocurrency exchanges. It underscores a commitment by major players in the industry to enhance the scalability and efficiency of blockchain technology. Furthermore, if Kraken’s efforts bear fruit, it could serve as a model for other exchanges, potentially accelerating the broader adoption of blockchain technology by businesses and consumers alike. Stay tuned for more exciting developments in this space as Kraken takes the plunge into layer-2 networks, promising a brighter and more efficient future for cryptocurrency enthusiasts.


Remember, investing in cryptocurrencies involves risks, and it’s important to conduct thorough research and seek professional advice before making any financial decisions. (Please keep in mind that this post is solely for informative purposes and should not be construed as financial or investment advice.)


Blockchain is a distributed ledger technology ensuring secure and tamper-proof transactions, shared across a network.

Yes, blockchain enhances cybersecurity by making data difficult to hack or alter through its decentralized structure.

Blockchains record cryptocurrency transactions like Bitcoin securely and transparently.

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