The Protocol: Kraken Awakens – as Ethereum L2 Candidate

Everybody’s doing it – launching new layer-2 blockchains atop Ethereum to provide a venue for cheap and easy transactions. This week brought the news (thanks to this scoop from our Margaux Nijkerk) that the crypto exchange Kraken may be considering its own layer-2 network, just months after rival Coinbase launched a layer-2, Base. Details below.

We’re also covering more job cuts in the blockchain industry as crypto winter drags on and token issuance slumps, even as digital-asset markets start to price in signs of green shoots. PLUS: Postscript on Celestia’s TIA airdrop, $37 million of fundraisings and a Q&A with Tegan Kline, CEO of Edge & Node, the primary developer behind the dominant blockchain-indexing protocol, The Graph, sometimes referred to as the “Google of Web3.”

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LAYER 2’S LAYER ON: One of this year’s dominant blockchain trends has been the rush by technologists to launch new “layer 2” networks that can process transactions cheaper and faster than the primary (and sometimes congested) Ethereum network. And many of the developer teams behind the projects are competing to land new companies and clients who might use their technology to spin up even more layer-2 networks, including several projects that surfaced just this week. CoinDesk reported, citing people familiar with the matter, that the crypto exchange Kraken is in talks with Polygon, Matter Labs and Nil Foundation about possibly using their technology to create a new layer-2 network – and has even posted a job description for a “senior cryptography engineer” who might work on the effort. Such a push would follow rival crypto exchange Coinbase’s move a few months ago to launch its own layer-2 network, Base. Another new arrival is Nil Foundation’s own rollup, which would combine zero-knowledge cryptography with another scaling technique known as