There are speculations that the cryptocurrency exchange Kraken is planning to build a Layer 2 protocol. Will it follow in the footsteps of its competitor, Coinbase?
Cryptocurrency exchanges were heavily affected by declining volume during the bear market. Many exchanges collapsed and went bankrupt. While others had to resort to options such as layoffs to survive the market conditions.
There were heavy regulatory crackdowns on the crypto exchanges, especially after the FTX collapse. Are major crypto exchanges now trying to diversify their business?
Kraken Layer 2 Plans
Kraken is hiring for a “senior cryptography engineer” with an annual compensation of $135,000 to $203,000. The job description says that the candidate will have an opportunity to “Design and implementation of Layer 2 solutions.”
Hence, there is speculation that this senior-level position involves the building of a Layer 2 solution. Moreover, there are reports, citing people familiar with the matter, that Kraken might use the technology of Polygon, Matter Labs, and Nil Foundation to support its Layer 2 network.
The primary aim of a Layer 2 is to employ networks or technologies that operate on top of a blockchain protocol. A blockchain network can achieve increased scalability and efficiency with the aid of an off-chain protocol or network.
Read more: Layer 1 vs. Layer 2: What Is the Difference?
A spokesman for Kraken told BeInCrypto:
“We’re always looking to identify and solve for new industry challenges and opportunities. We don’t have anything further to share at this time.”
Another centralized crypto exchange, Coinbase, announced its Layer 2 solution Base network in February. And its mainnet went live on Aug. 9.
The protocol has witnessed rapid growth since its mainnet launch. Last month, BeInCrypto reported that Base became the third largest Layer 2 protocol based on total value locked (TVL).
According to DefiLlama, its TVL stands at $294.08 million as of writing.
On the flip side, the Layer 2 protocol Base has also faced certain challenges, such as network outages and rug pulls.
Read more: Kraken Review 2023: A Review of Its Security, Fees, and Features
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