INK: What is Kraken’s layer 2 blockchain, and how does it work?

What is Ink? 

Ink is a layer 2 blockchain built on Ethereum, developed by the well-known centralised exchange Kraken, and officially launched on December 18, 2024.

Ink is built on the technological foundation of the OP Stack, which is the same modular architecture behind networks like Optimism, Base, and Unichain. Its goal is to combine the security and reliability of the Ethereum ecosystem with infrastructure designed for high performance, native scalability, and full compatibility with the Ethereum Virtual Machine (EVM) environment.

More broadly, Ink represents the expansion of the Kraken ecosystem into the on-chain Web3 space. It aims to provide users with a decentralised and secure operating tool as an alternative to using centralised exchanges.

The OP stack, the technology behind the creation of Ink

To provide a detailed answer to the question, “What is Ink and how does it work?” we need to examine the technology that underpins the project, specifically the OP Stack.

The OP Stack is a collection of open-source components developed by Optimism to enable the creation of scalable and interoperable blockchains that are fully compatible with the Ethereum ecosystem. 

One of the key features of the OP Stack architecture is its modular design, which allows each component to be updated or replaced independently. This design enables the infrastructure to be highly flexible and scalable. The main modules include:

This method enables projects like Ink to be developed on robust, shared foundations, significantly reducing development and code review expenses through infrastructure standardisation.

Technical features of Ink

Although the network is based on a precompiled set of code provided by OP Stack, Ink distinguishes itself from other layer 2 blockchains through the integration of advanced technologies and solutions aimed at enhancing user experience and security. Some of its most innovative features include:

The combination of these technologies, along with the OP Stack infrastructure, enables Ink to position itself in the market as a reliable network that integrates seamlessly with the existing DeFi ecosystem. Additionally, Ink is currently the mosteconomical Layer 2 solutionavailable. With an average transaction cost of just $0.000053, Ink establishes a new standard for efficiency and accessibility in scalable solutions on Ethereum.

Ink ecosystem: bridges, dApps and transaction growth

Despite being a recent entrant, Ink is rapidly becoming one of the most dynamic and dApp-rich networks in the Web3 landscape. Its native compatibility with the EVM ecosystem, along with bridges like Superbridge and Wormhole, has fostered an ideal environment for developing a robust, accessible, and continuously expanding DeFiecosystem.

Thanks to a strong technical infrastructure, direct support from Kraken, and integration with essential tools and protocols in the Ethereum ecosystem, Ink has experienced consistent growth in on-chain activity. This momentum has enabled Ink to surpass 600,000 daily transactions, marking a significant milestone for a network that is still in its early stages of development.

INK coin launch: utility and airdrop

As of now, no official launch date has been announced for the INK coin. However, the Ink Foundation has confirmed that the token will be introduced through an airdrop, which will reward the most active users on the network.

The INK coin will have a fixed supply of 1 billion units, with no possibility of changes through future governance mechanisms. This strategy aims to ensure clarity, predictability, and sustainability over time, thereby avoiding inflationary trends or excessive speculative behaviour.

Unlike many other Layer 2 blockchain-related coins, INK will not have a governance function. This means that control of the network will be delegated to the Optimism Superchain infrastructure, of which Ink is a part. In this context, the token will serve a purely functional role, acting as an incentive for on-chain activity and as a funding source for future marketing campaigns.

Current limitations and challenges

As noted earlier in this article, Ink is still in the early stages of its development, and this is evident in the network’s key metrics. Currently, the total value locked (TVL) is approximately £7 million, while the daily trading volume is around £2 million.

When compared to the leading Layer 2 solutions currently available, these figures underscore the early stage of the Ink ecosystem. In the coming months, it will be crucial for Ink to focus on expanding its user base and enhancing liquidity to solidify its position in the on-chain landscape.

One significant challenge is the issue of decentralisation. Ink was initially developed as a project closely tied to the Kraken exchange and currently operates under a highly centralised model, particularly concerning its sequencer and network infrastructure. 

While this approach enables greater efficiency and control in the early stages, it raises crucial questions about the future distribution of power and authority within the network. Therefore, transitioning to a more decentralised and permissionless model will be essential for ensuring Ink’s long-term credibility.

Final considerations

Thanks to its strong integration within the Ethereum ecosystem and a technical structure based on the OP Stack, Ink is establishing itself as a solid and rapidly growing blockchain that fits well into the DeFi context, despite being relatively young.

The upcoming launch of the INK coin, accompanied by an airdrop targeting active users, could be a pivotal moment for generating market interest and incentivising rapid growth in adoption and on-chain liquidity.

However, Ink will face significant challenges, primarily the decentralisation of the network, which remains heavily reliant on Kraken’s centralised infrastructure. Additionally, there is a pressing need to build a solid user base and stimulate real activity within its network.

While the question “What is Ink and how does it work?” may currently pique the interest of only a few insiders, the project’s evolution, combined with the token launch and ecosystem expansion, could soon make it a key topic for those looking to understand the future of Layer 2 solutions on Ethereum and decentralised finance.