The Real Reason Kraken Built an L2 | Andrew Koller & Hilmar Orth

Let's, let's take Kraken on-chain. Let's figure out how we can start taking our best-in-class UX, security, and everything that we do for consumer and pro and our deep central order books. And how do we, how do we take that on-chain?

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What's going on everyone? We're recording this, uh, Thursday morning.

Kraken just announced Ink.

Um, obviously had to record an emergency episode with Andrew, who is the founder of Ink. Uh, Ink is Kraken's new L2. And then Hilmar, who actually I met at Permissionless, the founder of Gelato. There are these roll-up-as-a-service platforms. Gelato is one of them. And Kraken worked with Gelato to launch the L2. So I thought we could have a conversation about Kraken's L2. But also there's actually a bigger thing happening, which is AppChain thesis. Uniswap launched UniChain. Everyone's talking about everyone's launching a chain, everyone's launching L2.

Why are we doing this?

How do you do it? Is it real? Does it really cost $15 million a year to do this? And so I think this hopefully this conversation turns into a bigger thing. But yeah, Andrew, welcome to the show. Hylmar, welcome.

Thank you. Thank you for having us.

Pleasure to be here.

Yeah.

Andrew, let's start with the basics.

Ink.

Obviously, I know what it is, but I want to know— I want to know the backstory. Like, I want to know when you guys started kind of scheming this up. Like, when— what was the initial meeting? Were you in those meetings or then you got hired to do this? Like, Tell me the, tell me the backstory of this.

Yeah, there's a lot to it, so I'm going to try to do the abridged version, but you can do it.

You can do the long version to share, share your— all right, the real one.

Let's do it. Let's do it. So I've been, I've been at Kraken almost 6 years and have worked on so many different, you know, products with like listing coins, with, you know, building out the custody solution, building out a cryptography team, doing all the kind of like basic things that, you know, an exchange needs to do and making really good deposit withdrawal UX. Making really good UX across consumer and pro products. But it kind of got to this point where it felt like, okay, what, what else, you know, what, where can we take it beyond an exchange? And this was almost 2 years ago at this point, you know, maybe a year and a half, I rehired somebody, or I was trying to rehire somebody that I'd worked with in the past. We built the parachain product at Kraken before, kind of like, that was like our first teaser of like an on-chain thing. And I rehired him because I did a very long walk in Amsterdam with him where it was like, we got to, we got to do something else. We got to do something more. We got to try to take Kraken on-chain. And, you know, we had like a 5-hour walk where we kind of came up with this idea of like, okay, let's just, you and me, let's just do all kinds of experiments. Let's do zero-knowledge proof verifiers. Let's make some contracts where, you know, you can authenticate to a liquidity pool or something like that. Or you know, even running all the stacks out there, like, let's do the testnet on Arbitrum. Let's do a Superchain testnet. Let's do zkSync. Let's run everything. And we had a lot of internal, like, fun with that, where it was a bunch of contests, you know, people minting things. I had lawyers deploying contracts, which I never expected a lawyer to do, but they were deploying contracts on-chain. Support agents and, you know, product managers were all, like, getting in there. So it was, we had like a lot of really good feedback and it was really obvious to us to just take this further. And then we settled on the Superchain that was, you know, us joining something that was like really strong network effects and it felt like the right move because it was really easy to use. The Optimism team is absolutely fantastic to work with. And then, yeah, we said, okay, this is it. Let's, let's take Kraken on-chain. Let's figure out how we can start taking our best-in-class UX, uh, security, and everything that we do for consumer and pro, and our deep, uh, central order books, and how do we, how do we take that on-chain? And that includes all the, like, authentication layers, um, accounts, you know, anything that's ancillary to accessing that central liquidity. How do we take the off-chain stuff, put it on-chain? And it made sense for us to just have, have our own chain. And, uh, then we met Hilmar and we decided Gelato was an awesome launch partner because, uh, you know, I don't want to run the thing ourselves. It's, it's nice to have some help.

Nice.

What is the—

if you were sitting down with maybe a board member at Kraken, or, uh, you, you know, we had Dave Ripley on the show several months ago and we're talking about a potential Kraken IPO, and you're talking with like a public market investor or something thinking about Kraken, how would you explain the the why behind INK? Like, why does Kraken need to move on-chain?

So the, you know, again, I think it's, it's kind of taking the— we've always offered trading and buying and selling of the assets that we support and all the blockchains that, you know, the hundreds of them that we run. And it just from like a creative standpoint, it made sense for us to like actually get involved in that. Okay, we're offering this as a product for people to buy and sell. But, you know, it just kind of intuitively felt like, okay, we need to actually put something on-chain and work with the things that we're enabling people to buy and sell. And then, you know, getting like philosophical on it, I think like it's no secret that the DEX volume is sometimes surpassing centralized volume. And I think it made sense for us to like explore that avenue and realize that those OG like cypherpunk values of crypto with self-sovereignty, permissionless money, self-custodial, like being able to plug in and just do something straight from your desk to manage your whole wealth. Uh, it made sense for us to lean into that because Kraken has always held those really close to us. Like, we have a ton of OGs at Kraken that have been in the space, you know, since like 2013, 2012. And, um, you know, we always kind of internally hold those— that culture really close. So this made sense for us to just take what do we do on a centralized format How do we move it more on-chain?

Can you tell me what it was like getting the company on board with this? I read in a— I forget if we wrote this or Bloomberg wrote this, but you guys have like 40 people working on this. We've tried to do— I mean, we have 75 people at Blockworks. We've tried to do initiatives. Sometimes it works, sometimes it doesn't. It usually actually has nothing to do with the technical aspect of it. It usually is about getting the company to like get on board with this thing? What did that look like?

To put it simply, doing all those experiments and having the lawyers that would be telling us no or yes, get involved with it and actually like use the tech was insanely valuable. So there's this like internal Ink general channel that we have that I kind of left it as like an open channel for the whole company to join in and you know, explore with us on this journey on-chain. And it grew to like 1,000 members really fast. So there's 1,000 people in there that are all internal to Kraken, and they all just are shooting ideas everywhere. They are deploying things on-chain. They're all having fun. So it was important to just like, yeah, take the whole company along for the ride.

Nice, nice. The obvious response, which I saw this in, you know, in a lot of the Twitter threads and Twitter replies when this got announced was, does the world really need another L2? And actually, Hilmar, I'd love your take on this too, but maybe we can start with Andrew because I think, I think those, those reply guys are going to get really fed up in the next several months as, you know, probably hundreds of L2s go live. But yeah, Andrew, how do you think about this? Like, why does the world need another L2?

I'll be, I'll be quick with my, my response and pass it over to Hilmar. But it's like, honestly, we were talking about this a little bit offline too, but like, why not? Why, why would you not do an L2? Because, and this is a cliché that's kind of overplayed, but much like the '90s of the TCP/IP kind of convergence of the internet protocols, I feel like that's happening with, um, you know, Superchain and particularly Ethereum and, you know, some of the, the kind of cross-chain intents and stuff. So if everything's converging, um, why would it— why would companies not have their own, their own L2 if they can bring all their authentication layers to be easy UX, one-click type of things where you're using some kind of liquidity that you don't, you know, you don't have to go through like several hops of brokers and all that kinds of jazz to get there, then yeah, why would you not take your stack on-chain? And then one final thing though is like, there was an interview a long time ago with Hayden where when he launched Uniswap and he said something like, for once in like my engineering career, you can launch an application used by millions of users and you can go to sleep at night and not worry about the infrastructure, right? Because it's all running on-chain. All the contracts are there. Everybody has visibility into it. And if we had more of our services doing that, powering DeFi, I would love it. I want to go to sleep at night, not worry about databases.

Helmar, how do you think about this?

Yeah, I fully agree with Andrew. Why not, right? I think it used to be that, hey, it's actually really difficult to spin up your own chain. And so why why would you go through all the hassle of actually doing it? But these days, you have providers like us that really focus on making it as easy as possible and abstracting all the complexity away. So why not, right? Why would you share? Like, we look at rollups, Layer 2s, as verifiable servers. And do you think you can scale the world, like scale on-chain to the world with a single server, like a couple of servers that everyone has to share? I think that's for me, not a realistic scenario. I believe in the hypothesis that you have, that companies like Kraken actually have multiple chains eventually that can horizontally scale, similar to how the Web2 internet scales. And so the more block space you can actually get, the better. And especially if it's straightforward for you and affordable to do, then why, why wouldn't you do it? Why would you share your block space with someone else where there are some random applications on that you actually don't want to interact with or you don't want to have on your chain, right? I think that's a big part. And I think the big difference between now and let's say like the old L1 era that I personally believe is coming to an end or will not get the same traction as let's say, for example, InkChain, is that we have companies now launching chains that actually have users, right? I'm talking about like Coinbase Base or like Unichain. With Uniswap or Kraken and Inkchain, right? They have real users that they can actually channel on-chain. And the most important thing still is to grow the on-chain user base. We have like 32 to 36 million users, I think, ASICs and Zs 2024 report.

Yeah.

And the centralized exchanges, they have a ton more probably. And so if they can funnel them on and help accelerate the adoption for on-chain, this is just great. So The more, the more chains, the merrier, I believe.

More chains, the merrier. Good for Gelato's business. Hilmar, can you explain that to me? You said Kraken could have multiple L2s. I don't think I understood that.

Yeah. So similar to how like Kraken today, it doesn't like— we look at rollups as verifiable servers, right? It's such a like, it's like you have a server where you can run some logic. The difference is that it's actually verifiable and trustless for other people to interact with. And you don't have to trust that the server logic is actually what the company claims it to be. But of course, similar to in Web2, Kraken doesn't run on a single server, right? Kraken runs probably on a ton of servers that they can horizontally scale via like cloud providers, or maybe they even build like their own data centers or something where they built technology to enable this. And this is what we are already seeing happening in Web3. There are already applications where a single rollup just can't handle the load appropriately. And their applications or the ecosystems actually need to be sort of sharded. And this is what Ethereum's roadmap was eventually at the beginning as well. They wanted to shard Ethereum, right? You need to shard the state and access to the state across multiple instances. And I believe in a couple of years, Kraken will grow beyond the capabilities of what a single rollup can provide them today. And so they will need to have a more sort of elastic Web2-like scaling solution, in my opinion. And so this goes a bit against sort of vertical monolithic, hey, one chain that can scale to the world. I just don't believe in this. I think you will need to have multiple instances that are all interconnected. And this is really what we at Jelat try to help build and help achieve for these projects.

What do you think, Andrew?

I think we're obviously like a long way away from that, but I definitely see that future, right? Like you can imagine, If we had all of our clients on-chain right now, every single one of the millions, our current one could probably scale with that, with the limited, you know, because we're going to mainnet in Q1, with the limited offering, it would probably work on that. But now if we're starting to decentralize the stack a little bit more, and we're saying, okay, as we push more into DeFi, we need, you know, we need something that just handles like authentication and maybe attestation, right? And that's like happening all the time. And that's like one piece of the stack that's interoperable with the others. I could see that being the future.

That's interesting. If you don't like that Kraken has one L2, just wait till they have multiple.

Yeah. How long we have tentacles, right?

So yeah, exactly.

Exactly.

Yeah.

Fits with the octopus. How long did it take to go from, hey, deciding like, you know what, let's, let's do this. We've got exec sign-off, like, let's make this happen to, to today.

Trying to think of the timelines. I think this was maybe 8 months. I think, I think a solid 8 months. Some of the experimentation was before that earlier in the year. But I think like 8 months of a timeline of, you know, really deciding on, on the Superchain, deciding on launch partners, and then working through all of the kind of complexities that it takes to make sure you have like the most cracked engineering team that you can get for protocol development and, you know, having all the support that you need across like Discord and everything. It was, it was a big buildup. Yeah.

Yeah. How did you think about sequencing the launch of an L2? So you guys launched— as soon as you guys launched your wallet, that was the moment in time when I was like, oh, they're launching an L2. And there are obviously things that you have to to do? I mean, you could have, like, you could have just launched the L2, then had a wallet, but probably not. It's obviously way better if you have the wallet, because it's kind of accessible. Like, how did you think about sequencing this whole thing?

Yeah, this, this is an interesting question. Because wallet is something that we always had in development, we wanted to make sure that we were providing, again, leaning into like Kraken OG values, we wanted to make sure that we had our self-custodial offering. And It kind of was independent of the wallet for a while. It was just, you know, like, okay, we have these ideas of taking Kraken on-chain. If we're going to do an L2, then we need to make sure that wallet is very much plugged into that. So with this kind of, this move and making sure that Kraken is releasing Ink, you know, we're releasing that, that we have an L2, and then also wallet is very intertwined with that. So the teams that I lead are the Ink team and then the wallet team, and we're going to be very joined at the hip and making sure that whatever we're doing on Ink goes into Wallet and Wallet into Ink, vice versa. So yeah, it was independent to start, but then, you know, it just made sense. Like, why would we be thinking of 4337 or something on Ink and ignore Wallet? They have to be joined.

Yeah. Yeah. Yeah. Hilmar, how do you think about sequencing this for, I mean, zooming out from just Kraken, like, do you think there's a right way to sequence this? Is it like, do you think folks also should have a Wallet if they have an L2?

So for me, having a wallet and having users use, like having a user base sort of off-chain, plus having the chain yourself just provides you with immense superpowers. I think this is a pattern we are seeing a lot, right? With Uniswap wallet.

Uniswap launched a wallet.

Base, right? Kraken. And it just enables you to provide so much better features. Let's just think about the, like, you have a lot of users that have money stored on Kraken to like trade, buy assets, and have their ETH there, their BTC there, right? And it provides them with like a pretty good like Web2-like experience. They can log in with their email. They don't have to worry about private keys. There's custody involved, right? What Kraken— like, I'm not, of course, if I say something, I'm not speaking on behalf of ING or Kraken. It's just like ideas that I have that I think are plausible. For example, like, why don't you allow the assets that are stored on your centralized exchange to be used on-chain by basically being able to have much more control over like the block space, the DeFi wallet, plus then also the centralized exchange and the custody solution? You can all intertwine this, right? And you can say like, hey, even though my ETH is on Kraken because I don't want to deal with private keys, etc., I can still use them to lend my money out on this lending market, right? Right? And this is just like the power that you get if you have like a chain where your liquidity sits that you can front to users, the wallet that connects your off-chain balances with your on-chain account, and has like some signatures to verify this. And then of course, the exchange where the custody is based. So I think we will see more of this. And yeah, all of this together just provides you with like these superpowers.

Yeah, I completely agree. It's a superpower. And I mean, we will at Q1 be working like very in the open. So, you know, cannot confirm or deny like some of the things that Hilmar is saying, maybe we are working on, but it'll all be out there in the open, you can just read the code. But the— it is a superpower. And I think that having— being a part of the Superchain, like we're, we're really not viewing the wallet as like a super competitive thing, right? It's like, it's like our portal, right? It's our tool that we're going to be leveraging our L2 with. And in it, we're going to be connecting to all of the other Superchains too. We're not going to ignore anyone. We launched the wallet with Base support. And, you know, when we did launch it, we knew that we were joining the Superchain at that time. So we wanted to make sure that it is that rising tide lifts all ships and we're supporting everyone.

That's cool. That was actually going to be one of my questions, Andrew, is are you going to do Base support? So I like that. Maybe we can get into actually the slightly more technical side of things, which is the decision to launch on the Superchain. There's a really interesting battle right now going on between, I'd call it like the OP Stack and Superchain, Arbitrum Orbit, Avalanche L1s, Cosmos been around for a while, obviously ZKSync has the Elastic Chains. Someone's going to get mad at me because I'm forgetting them. Anishya, etc., etc. I love you if I forget you. How did you think about picking Optimism here, Andrew? Did you guys do a full review of like ZK Elastic Chains and Avalanche and Cosmos and Arbitrum Orbit? Did you, did you do that or you just were very close with Ben and had Optimism? Like what was the story here?

A little bit of all of it, honestly. Like we knew the Optimism team, I think, pretty well, but like on the technical side, We did try, we went through everyone, right? We had, at one point, we had an Arbitrum running with our Arbitrum stack with the— I'm drawing a blank at the name right now. Stylus, sorry. We had Stylus running and we were allowing some of our internal Rust developers to make some Stylus contracts. And it was a good kind of trial period of that. And that is powerful technology. We loved using it and being able to write some arbitrary contracts in Rust or import some crates that just needed a little bit of changing to be able to work on-chain. That was really cool to use. But ultimately, it was, you know, the kind of like immediate interoperability that Superchain was going for, and knowing that the network effects are extremely strong already. And we would be a part of that kind of interoperable network that is going to be sharing liquidity. So it really came down to like the interoperability as like kind of like the first ultimate decider on that.

Well, all of them are interoperable, right? Like, Arbitrum is interoperable with other Arbitrum things, and Elastic Chain things are interoperable with other Elastic Chain things. Do you— when you say interoperable, do you just mean that they've had early success getting like, you know, Unichain is there and Base is there? So is it less about the technical side of being interoperable? It's more that they've had early— the network effects are kind of happening?

I think the network effects are already happening. And we had just had a lot of confidence in the roadmap of that interoperability being there. Like I've said before, like if we're executing a trade or swap on Ink and the user has no idea that you're tapping into liquidity of anything else on the Superchain, I felt that that vision was pretty strong. And what, you know, those kinds of network effects that are going to increase that the most were on the Superchain. And then also the kind of discussions that go on on, you know, the Superchain discussions about like, how do you, how do you have interoperability with the rest of the chains out there? So it's really cool to see that nobody's kind of ignoring anyone else, right? It's like nobody's kind of making their walled garden and saying like, Superchain for Superchain and nobody else. It's, you know, everybody's thinking about the other interoperability with the other chains. Hmm.

What were the— who has the leverage in that negotiation, Andrew? Because, you know, if you look at the, like, the economics of something like this, like, let's use Base, for example, Base obviously shares, you know, a certain percentage of its sequencer revenue with the Optimism treasury. We have a— I'm looking at our dashboard. It looks like they've earned like 2,500, 2,600 ETH in sequencer revenues from Base since their launch. Yeah, about a year ago. So that's, you know, 2,500 ETH from their sequencer revenues about a year ago. That's good money. Who had the— I guess maybe two-part question is like, how do you think about that revenue split for you guys? And then who has the leverage in that negotiation?

Well, I think it was a mutual agreement. I think it was— it was a very—

all agreements end up being mutual.

Yeah, for sure. For sure. But like, I don't think anybody strong-armed anybody into saying like, we're getting, you know, we're not paying you a dime or something like that. It was, you know, we are using a really powerful stack that has, you know, an MIT license. And so like, we, we are able to take that and, you know, we have our Superchain compliant thing, there's nothing preventing us from modifying it and doing something else on the side. If we really wanted to do, again, like another L2 or even an L3 that's modified. We loved the freedom that that contract had for us. And so I think it's just, it's like almost paying a service fee for using some really awesome technology. That again, we don't have to care about. We, you know, we don't have to care about all the upgrades or like worry about managing our stack. It's just we get everything out of the box. And I'm happy to have in the contract some kind of fee to be able to use that.

Did you ever think about just forking the OP stack instead of building on the Superchain?

We did.

But like from a cost analysis, I did not want to have like 20, 30 protocol engineers like always keeping up to date and like doing all these changes to the protocol, uh, to make sure we're, you know, not introducing any vulnerabilities or, uh, playing catch-up with the rest of the ecosystem. I, I wanted to make sure that we had a team that would just focus on the UX, the dApps, um, all the ability to bring Kraken users on-chain and not have to worry about like the, you know, intricacies of maintaining a blockchain.

Yeah. Hilmar, you're nodding and smiling. Maybe we'd love to hear your thoughts on this topic too.

Yeah, I think forking the stacks doesn't really make sense. Like, the question is, why would you do it, right? Do you want to add like some precompiles or something, which at the end of the day are mostly just like gas savings to your chain, which arguably with like the upgrades in Ethereum with DA and blobs is already pretty cheap from a variable cost perspective. So I think what is great about OP Stack and Optimism is what Andrew mentioned is MIT license, open source. I kind of look at it as we have these sort of server standards that are being developed right now. And do you want to be on your own sort of version of Linux that no one else is using? Or do you just want to be able to be on the same standard that everyone else? Because if you want to, like, we are building this, we are building Web3, right? We're building a new internet. And you want to be connected to everyone else. And as soon as you do your own thing, and then it might not be as easy as you thought to be interoperable with all of them. And so what OP, I think, very sort of objectively has is network effects. They have right now some of the biggest names, some of the biggest chains, one of the, like, I argue, probably the biggest, like, the biggest amount of liquidity on their ecosystem. And if you want to be part of this, for now, I think joining the Superchain makes a ton of sense. Long term, I believe every, all of these ecosystems will be interoperable, right? Right now we are building these sort of like intranets kind of, we are in this phase similar to the internet back then, but I'm pretty certain, and this is like ZK in my opinion, eventually, right? All of these protocols will be interoperability with each other. And so there will be a set of standards that will be used, probably not one of them, but I'm pretty sure OP will be one of the primary ones. It's a good choice.

Hilmar and Jörgi at Gelato, how much do you push people into, or not push people, like recommend where to go build? So do you, like when you go to Andrew, did you say, hey, you can use Gelato and build anywhere? Or do you go, hey, you can use Gelato, you can build anywhere. And by the way, we recommend OP.

So we don't support all stacks and we won't support all stacks. Like we support the stacks that we believe in actually.

Who do you Who do you support?

Makes sense. So right now we only support OP Stack and Optim Orbit Stack. There will be more stacks that we'll be supporting eventually, but they have to make sense from first principles for us. And we need to like, I don't want to run chains on stacks that in 2 years I believe won't be like the standard anymore. And then there need to be these gigantic migrations. So I would rather be upfront with the customer and say like, hey, use the stacks that actually make sense. And right now it comes down on a case-by-case basis. I think for Andrew and the team, OP stack makes a ton of sense. OP is one of the most widely used ones. The network effects are great around it. Performance is not like something that you need to really squeeze out now for, for InkChain. You don't want to build like the largest perp decks in the world probably as an app chain right now there. It's fine. If you want to go like super low latency, you want to service very low latency use cases, then Optimism Orbit right now offers like very fast block times, for example, which are quite useful for this. So it's always a case by case. It always depends on what the customer really wants to build. For Ink, I think OP made a ton of sense.

Yeah. Andrew, why did you guys pick Gelato instead of— like I saw Alchemy has a rollup as a service platform. I saw Caldera has Caldera is another, Conduit is another. Why did you guys pick Gelato?

Simply the ease of use. But, you know, in more detail, I think, like, we always love in this whole journey, you know, exploring the stacks and everything, we always love this journey of like meeting with the teams and like, kind of like seeing how we're going to elevate each other. And Hilmar and his team were like so open to wanting to like work with us on tooling, work with us on support, basically asking anything that we need. They'll be there for us and always had this line of communication open. So I think we, we honestly just like fell in love with that instantly. It's like, this is going to be a really good partnership. And then of course, the ease of use, like anytime that the developers have had need or needed a change or are deploying like new testnets, like you just click a button. I don't know. It's like it couldn't be simpler. So I, I only see this relationship growing like, you know, for many years on, on hosting this and Yeah.

Hmm. Did you think, did you think about doing OP stack or let's see, trying to get the terminology right. Did you think about opting into the Superchain but not doing it through Gelato, doing it in-house? Like, I think my understanding is Base does it in-house, right? They don't go through Gelato or Caldera or Conduit or one of the roll-up-as-a-service providers. Did you think about doing this?

Yeah, we did. We did explore earlier in the year. But, you know, as I, again, as I was kind of doing the cost analysis and like looking at like all the security and everything you got to put in place and the developers that I need to make sure that are basically full-time maintaining this, I think it was actually when the first team we met with was Conduit and they were pretty accurate in saying that like you need like a full team, like a full infrastructure team, like 100% of the time on this without any, you know, dedication to any other projects. And so I initially kind of had that in like, okay, as I'm showing this to executives and what we're going to have to do, that was kind of always in the plan of like, I need this full team right here, I need the resources for it. But then all of that can just be offloaded and we can have more concentration on, like I said, the UX and the applications. And so we kind of abandoned that earlier in the year.

Yeah, maybe to chime in here as well, why it doesn't really make sense to run it in-house. And I think the reason why Base does it, because back then there was no good roll-up-as-a-service provider, I think, quite frankly. And that's why they didn't have a chance, really. They didn't have another option. From a cost point of view, like you will always spend more if you do it in-house. As you say, you need to build up an entire team that actually tracks all of this. And then the question is like, why would you do this, right? If you want to then eventually take this infrastructure and service other rollups as well, and if you want to build your own rollup as a service business, kind of, right, then it might make sense to actually do it, right? Because you build up NFTs and so on. But if that's not your primary business model, if your business model is something completely different, then there's just no way to justify the investment here. And so I believe that we won't see any chains that launch by themselves in the future, maybe just very rarely due to, I don't know, maybe whatever political reasons. But just from a cost perspective, I ran through all the numbers, it doesn't make sense. It's also not that you give up any sort of sovereignty or something, right? It's something that you can always take in-house eventually if you like to.

What, Andrew, what about the DA layer here? Is it just Ethereum? Ethereum? Or did you look at like EigenLayer or Celestia? Or yeah, how'd you think about the DA layer?

I think, yeah, initially we explored everything to start. Celestia, EigenLayer, everything. But we're kind of just going like the simple route for now with Ethereum as the DA. But, you know, we are open to any kind of changes in the future. I think we don't really have like a strong opinion on DA right now. However, the L3 DA is like where we, you know, eventually want to explore a little bit more and see like, okay, could we have just the L2 as Ethereum as DA and then L3s, we kind of have like this more modular thing where, you know, you have Celestia for one L3, or we encourage a team to use Celestia, we encourage some other team to use RL2, or we encourage them to use, you know, some other DA out there. I think, I think that's something fun to explore.

That's cool. Tell me how you think about Ink versus Base, and also like what you think Base has done a good job at and what you think, you know, you've got the hindsight of having, you know, they've been around for a year, so you can, you can learn a lot of lessons. So what do you think that they— maybe this is the wrong way to put it, but like, not what did they do wrong, but like, what could you do better than them?

So what Base is doing, like, amazingly, and massive respect to Jesse and the team, it's really fun to have watched them over the last year or two years. But yeah, the generalist approach, I think, is really, really cool, because it really is just building anything on-chain, like literally anything under the sun. But, you know, where, where we're taking it is like more of a bottoms-up approach instead of like fully generalist of, you know, come build everything and, you know, make whatever it may be like your ice cream truck on-chain or your dog walking service on-chain or something like that. We want to focus on more of like the specific DeFi use case, take our, you know, decade and a half experience of centralized order books, get those things on-chain somehow. Make it so that on-chain users can tap into that and vice versa. So we really want to make that like a really good DeFi UX, reduce the number of clicks, make it super safe, make sure we have sequencer-level security so that, you know, people don't even know that rugs exist or don't even know that drainer contracts exist. That would be an absolute dream come true. So I think that like kind of hyperfocus on the DeFi theme first is where we're going to take ours.

Nice. The last thing on the economics that I forgot to ask is what is your revenue split with Optimism?

I don't know if I want to say.

Fair, fair.

You'll see it. I mean, when the data starts getting there, I think it'll be very transparent.

Yeah, yeah, yeah. Well, I'm sure we'll add you guys to— but we're starting to basically add— I don't know if you can hear, I can zoom in a little bit. We're basically adding different chains on the Superchain into this one aggregate Superchain view. So right now we have Base, Mode, OP Mainnet, and Zora. We need to add— I want to add Krak— I want to add Ink, and then I want to add Unichain as well. But you can start to break down like the financials, transaction fees by base, transaction fees breakdown, L1 expense by chain, gross margin. You can start to look at on-chain activity. And then you can start to actually break it down by dashboard. So yeah, we'll have to, we'll have to get Ink on here.

Awesome. Yeah, it'll, it'll definitely be transparent there. So hang tight.

Cool. Cool.

And that's the beauty of on-chain stuff, right? It's all transparent.

Yeah, we will know.

You don't even need to ask Andrew anymore.

We will know for sure. Anything else in terms of like Base that you think they got that where you think they might have like missed the mark?

Um, I don't know, like, I, again, like, all of us internally don't really view it as competition. So like, you know, we don't, we don't think that we're trying to like dethrone anyone, we're just like joining, you know, an ecosystem and, you know, doing it in our own way and bringing our users on-chain. But, you know, maybe it's the You know, like I said, on that hyperfocus, we want to make sure that some of the tooling we make really enables specific applications. And maybe, you know, Base is doing really well that generalized tooling. So if we have the one-click thing where you can just like spin up a template on a specific application, then that's, I think that's where we're going to do well.

Nice. Yeah, that's actually what I was going to ask you next was about developer tooling. Like they have obviously pushed, they did, you know, Coinbase Wallet and Base, and then now they're pushing really heavily into developer tooling. Is that where you guys think you'll go next, or is there a different variation on that?

Yeah, we definitely will. Like, leading up to mainnet, we are going to, um, get a lot of tooling out there. Um, but like I said, it is going to be very focused. Uh, I think it'll have a lot more ties to Kraken and its infrastructure, and like, like I said, trying to bridge that off-chain to on-chain world. Um, so again, like the order book, centralized, um, liquidity to on-chain. And then the authentication layer and maybe some attestation, right? I think our tooling will be like very focused on those like parts of the stack and allowing people again to have like good templates in Cursor or Replit for DeFi applications, which could be like charts, you know, like a swap screen or perpetual futures screen or options, whatever it is.

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I mean, you guys are obviously amazing, like world-class at building trading things, trading experiences, institutional trading experiences, prosumer, retail. Will you take some of that experience and start to build your own apps on, on Ink, like your own trading apps? Or yeah, how do you think about actually building up the app layer here?

I think initially we're not going to go straight into, like, say we have a team that's building an app that they deploy on-chain, and then it's like something incubated by, by Kraken. I use the word incubator there because we do, we are setting an incubator up where we're going to be working with teams that maybe don't have a home yet, and they're kind of early stage, and they want to get in on a fresh ecosystem with some tooling that we can help them out with. And we'll be helping fund those. And, you know, that's in the incubator that they can they can be a part of, they can get into our channels and, you know, we'll be right there with them. I think it would be maybe, you know, maybe 6 months or a year down the line where we might want to actually focus on some of our actual applications and deploying those on-chain.

Hmm. Nice. What do you think that could look like?

I don't really know. That could be, that could be, could be our own DEX. It could be, you know, something that has to do more with consumer. Not ready to say yet.

Okay. Okay. I'll take that. I don't know, as I do know, but I'm not ready to share it. I'll rephrase. I'll rephrase for you. What does it mean to be DeFi-focused? Because there's a marketing and a cultural thing of being DeFi-focused, which is like, hey, BD team should like get DeFi people to come build. But there's actually a technical aspect too. Like you can start to do things. I don't know, what's the thing that would make it more friendly to DeFi? You could enshrine oracles. You could do something like enshrining oracles like Atlas did, right? That actually technically does make it more friendly for DeFi to come build there. So how do you think about that from a cultural and BD perspective? But actually, more importantly, I'm kind of interested in the technical side of focusing on DeFi.

Yeah, from the BD perspective, of course, that's like, you know, outreach to everything that is out there to make sure that, you know, they have a nice and easy home to be able to deploy their stack. And so like, you know, you need that liquidity on your chain. But again, Superchain and interoperability, hopefully, you know, you don't have to worry about like every single protocol going over to your chain in the future. But, you know, it's kind of the, the, we're doing a lot of experiments on cross-chain intents right now. So 7683 standard, we, we want to make sure that, um, we have really good documentation and, you know, we're leaning into that. There's everything, all the advancements with 7702, anything that requires so many different steps in DeFi that requires a lot of actions by the user, we want to reduce that friction too. So leaning into leaning into 7702, I think helps with that. I think that's that, you know, any of the other things again, like we're kind of shy with this initial announcement, but then the moment we go to testnet and mainnet, there's a lot more on the way.

Yeah. When are those dates?

Testnet is November 11th, right at DevCon. We have a hacker house on that day. And then mainnet is early Q1. It could accelerate too, depending on how ambitious and how many late nights we want.

Let's go. Love it. Accelerate, Andrew. Accelerate. Hilmar, how many L2s do you think launch in the next several months?

Hundreds.

Hundreds.

Hundreds. Let's go.

Hundreds. Like, we already seeing, like, in production, we'll see until the end of the year, right? But I think it will eventually come to a point where every bigger application will— like right now what is happening is that a lot of the bigger, all of the bigger Web3 applications that you know today, they will have their own chain. This is already obvious to me. You just need to read the forums and read between the lines and tweets of founders and stuff, right? This is already happening with every single larger application. And what is now happening is we're seeing Web2 organizations or central, like I say, centralized exchanges that are very crypto-native, like Kraken, for example, they are now also coming on-chain. This is actually what I'm most excited about, because they bring new users to the ecosystem that they already have, which are crypto-trained. And then I think we will eventually go to a point where we actually have non-crypto-focused tech companies join in, non-crypto-focused finance companies come and join in. We see it with BlackRock, of course, not with their own chain right now, but they are experimenting. And we are already in talks with some other really big enterprises that are thinking about doing it that I cannot talk about, but they're like some of the biggest tech companies in the world that are thinking about it. So I'm pretty certain we will maybe not over the next 3 months, but over the next year or so, see tremendous uptake in this.

I think it'll be like, yeah, we'll definitely see like BlackRock and NASDAQ and Dow Jones, like all these places. You know, I hope, you know, this isn't like just like complete, you know, bullish optimism, but I do hope in 10 years, like it is just like every single big company out there has their own L2 or has their own chain in some format. And there's so much more of our online activity that's happening on-chain, even beyond finance. And then, you know, I think, I don't know if you don't mind, like, Hilmar, I do have a question on rollups as a service. Did you see competition in Google or AWS? Do you think there's RaaS coming out from bigger players?

It would make sense, of course, right? Like, if I would be Google, if I would be Vercel or or AWS or something, this should be on their radar eventually. Of course, the question is, do they want to build themselves? Do they want to acquire? Do they want to— what is their game plan here? I think it will be very difficult for them to be as cutting edge as kind of like we are that are literally in the trenches, building and contributing to the stacks ourselves. We are contributing to the UP stack, for example, contributing to other stacks. So it takes a lot of expertise, I think, to be ahead of the curve and things are changing so rapidly. You mentioned they're like 5 stacks, right? Like, how do you want to deal with that? So I do believe it is inevitable for them. They have to come in eventually. But yeah, let's see how and what sort of form they will enter. I think that's interesting.

Yeah, cool.

I think that will happen sooner rather than later, by the way. One of those people that you mentioned, I think will do that. Andrew, can you— I know Hilmar's pitch to me. Hilmar gave me the pitch of permissionless. That Blockworks should have an L2. And he then went and built a Blockworks L2 on Gelato, which I, which I haven't used at all, but it was good, good marketing, made for a good tweet. Andrew, do you think— so you said that all the, all these big organizations will have L2s. I would agree with you if they, if they move money in some way, like I understand that vision. If they move money or they trade or they have assets somewhere, But someone like Blockworks, like, there's no money moving through our platform. There's like, there's like words and audio and stuff like that. Why would, why should, why should Blockworks have an L2? Or do you think that we should not have an L2?

What, what's the biggest, you know, like, so you said audio and video, you know, like, it's, it's all like production. Like, what do you, what would your users want if you said right now, like we're doing an L2, do you think you would just get like a terrible reaction? Like, why? Like, what am I going to do with it?

I mean, I mean, I think we would get an amazing reaction because everybody wants— I mean, I've probably had 1,000 people try to— they would, they would be excited, but for the wrong reason. They want Blockworks to have a token. So the number of people who want Blockworks to have a token, so they'd be, I think, excited about that.

Like, give them what they want, give them what they want.

But there's nothing to do on chain. Like, there's no, there's no thing on chain. So it honestly feels like, like, I mean, everyone pitched us in 2018 to do an— in early 2018 and in 2017, but well, before we— that was really before we had Blockworks. But like, everyone wanted us to do an ICO, and then we're like, obviously we're not doing an ICO. And then it was like, in 2021, it's like, are you going to launch a token? We're like, we're not launching a token.

And now it feels like, are you going to launch an L2?

We're not going to launch an L2. Hmm.

So I mean, there could be just like the governance structure of it. I mean, that's like one, like, you know, that is influenced by tokens. So like, you've already obviously explored that in the, you know, our distant past of the ICO era. But, you know, it's like, I love the, like I said earlier, with Hayden's comment of like infrastructure, you don't have to carry care about, it's just on-chain. So even beyond the finance and everything, that like user authentication and like kind of social aspect of it. So if Blockworks was more moving into like anything that has to do with social or like you want to socialize some more of your content into like your own ecosystem and your own chain where like profiles like evolve over time based on like how people are interacting with your content and products. I could see it being something that maybe you launch and it's like, Okay, now let's see, let's see where we can take this, right? Let's do some social stuff. Let's, you know, let's get some of our user authentication on there.

Yeah, okay.

Maybe to add to that, like, for me, rollups, I see rollups today as sort of like extensions of companies that enable also other people to access either the user base or some sort of IP or unique value from that company and do something with it. For example, in the case of, let's say, Base or Kraken, what you have is you have a ton of users, you have order flow, you have people that want to, that are willing to buy and sell assets, and you can redirect them to an ecosystem where then other people can come in and they can use this liquidity and this order flow that is directed to this chain to then build cool applications. That actually leverage that, right? Pudgy Penguin chain, what is it, Abstract or something, right? Do they need a chain? They have IP, right? They will probably want to take this IP and make it available for builders and say like, okay, cook, let's see what you come up with, with my LP. You can rent it, you can pay me for it, you can build a game with it, you can do this, right? So you guys are probably more on the IP side, like you own probably IP, you generate IP. You generate content, can you make this content accessible to people? Can people rent this content, borrow this, pay for it, and remix it and do something with it that you can benefit? If that's the case, I think then there might actually be a use case, right? But if you don't have that, of course, at some point, not everyone has to have a chain in the next couple of years. But I think there can be use cases.

Somehow I've walked myself into a sales pitch from Helmar. So I'm gonna pivot back to to Ink here. Andrew, how do you, how do you think about the Ink token or a future token? So Base has obviously not had a token. I believe that one day they will have a token, even though they keep saying they're not doing a token. I'm curious how you think about this.

So no, no plans at this time for any kind of token. I, you know, we've always like just thought about it, like in the exploration and experimentation phase, like what would it look like if we did have one? But, you know, that was definitely shelved and there's no, no plans.

Why not? Like, is that only a— obviously your lawyer said to say that, like, that is a, you know, you know, but like, what actually, why not? Is it because— is it 100% because of the regulation on the legal side? Like, let's say there are no regulators in this world. Would you launch a token?

100%. I think it would be a lot of fun to do. I think you absolutely could do some fun things with like your own token and doing some kind of native yield with it, or, you know, like having governance and all the things that, you know, you've done with tokens in the past. But the— yeah, I think that we have to see what happens with the regulatory side and everything on, you know, the elections coming up in the US and then Fortunately, there's a lot of clarity coming around the world, like with Mika in Europe and everything. But I think it's way easier to just build something and like use, create a really good L2 with good UX, and not worry about that side, because it does get really complex. And I could see us having an easier path to it sometime in the future. But like, you know, right now, it's just not even on our minds.

Were there conversations about how doing this, the pros and cons of doing this in relationship to a Kraken IPO?

Hmm, like, if there's conflicts?

Yeah, like maybe public market investors don't like that you guys have a chain. It's confusing. It skews the messaging. It's not as clear of a message.

I think the feedback that I know that we've gotten from, you know, the board or other kind of tangential, like Kraken investors is that this is really, this is us like pushing the company further. So it's like, I don't think there's any kind of conflict of interest with our current products and user base. It's just another offering. It's another, you know, networking avenue for Kraken clients to experience more of the ecosystem. And hopefully, you know, more of our ecosystem. So I haven't seen any kind of like, you know, conflict on, like, does it cannibalize anything or vampire tax or anything like that?

Yeah. How do you think— maybe you could tell me the rest of, like, your thoughts on the rest of the, like, synergy between Kraken's business and Ink. So two of the things that I was thinking about are, I mean, you guys have, like, interesting stuff happening on the Bitcoin front, and then you also have interesting stuff. I mean, you guys have always dominated the staking space. I forget the company that you guys acquired back in the day. I think it was called Stake. Yeah. So today you have I should have pulled up our staking dashboard, probably like a, I guess, roughly a million ETH staked on the platform, give or take a couple hundred thousand. I'd guess you guys are probably third biggest exchange in terms of amount staked, probably top 7 to 10 in terms of like total platforms with stake on it. How do you— maybe we can start there. Like, how do you think about this intersection of staking? And now you have the wallet, and now you and you have this big centralized platform, and now you have the chain, like, how does that come together?

I think the dream that I've always had ever since, like, starting this project, like, over a year ago was, how do we make sure that every single product at Kraken eventually, you know, with enough education and, you know, ability to use a really easy-to-use chain, every single product or every single PRD has some on-chain component to it. So if somebody's thinking of some traditional finance type thing that we are building and integrating, there better be a nice big section in research of on-chain in that PRD. And I think for staking specifically, like, this is a really awesome team of people building out Ink and the wallet and all the tooling around that. And they're going to be providing a ton of education because we have amazing talent all across Kraken. Some people maybe haven't used anything on-chain before. So we want to make sure that, you know, the whole company is plugged into that. And so like things with staking that, you know, we just did kBTC, our kind of first wrapped token. I think we want to leverage the talent we have on Ink to, you know, kind of have that bridge with the exchange and say, what else can we wrap? You know, what other maybe liquid staking tokens can we do? You know, what kind of yield opportunities can we provide on some of the things that we have on our centralized platform? And it's all, you know, those kinds of things as we're setting this up is all an experimentation and kind of like early discovery phase. INK has a very large, you know, kind of influence being able to educate and spawn these kind of new ideas in different domains.

How do you think about the other side, which is the Bitcoin side? I'd also be curious to get both your guys' take on just like zooming out from JustKraken, like Bitcoin DeFi and like this whole like Bitcoin Renaissance and the Bitcoin L2s that are happening. But maybe, Andrew, if you want to start with like how that intersects with INK, and then I'd love both of your guys' take, Hilmar included, on just Yeah, this whole Bitcoin Renaissance.

I think, um, okay, like really quick personal views on it is, uh, and they shouldn't cloud like what's going to be popular because I could just have the unpopular opinion, is I want Bitcoin to like ossify and I don't want the protocol touched because I love, you know, I love myself, my friends being able to maximize their wealth as much as possible with Bitcoin. Um, and then I don't really want that touched, right? I love that the other networks are doing a lot of experimentation. You have Ethereum that has, you know, compute on it and everything, and that's like where, um, you know, you can do more things than you could do on Bitcoin. But with the, the Renaissance and everything, obviously more power to people if they're doing, you know, neat things with it. I view how it intersects with Ink as we do have our L2, it is on the Superchain, but we're not going to ignore any other chain out there. Like we're, we're already doing a little bit of experiments on like how are we going to be ensuring that our intents are, you know, going to be working with Solana. And then if like BitVM and all that with Bitcoin takes off and gets more popular, we don't want to ignore any of that. You know, of those top chains and of those experimentations, we are always going to at least, you know, allocate some, you know, fun like exploration time every month to make sure that we're not falling behind on any of those innovations.

Hilmar, what do you think about all the Bitcoin Renaissance, Bitcoin eco stuff?

Yeah, so of course I should be biased towards more L2s and stuff, but I am mostly bearish on most of the Bitcoin L2s that I'm seeing out there. It makes sense if you want to bootstrap an ecosystem and you believe that you can get a community rallied around your sort of ecosystem, your chain, your ecosystem. And you pinpoint like Bitcoin around it and you say, okay, this is Bitcoin-focused and we want to get all the Bitcoiners on here. I think that makes sense. But trying to shoehorn a rollup into Bitcoin as like probably the most inefficient data availability layer out there is just not something that I think I find intuitively interesting. And I don't think it makes a ton of sense. I think it's motivated by the wrong reasons of mostly funded by like big mining operators that want to see some sort of use for Bitcoin, and they want to pump their liquidity in there, and then I don't know, rally the TVL up for some chains and so on. So I think there are a lot of misaligned incentives in these. And I still have yet to see an interesting and compelling pitch actually that makes me bullish on it. So yeah, I'm not that You went in for the kill shot.

That was good. Andrew's too polite. Yeah. Cool. Andrew, anything else that we're missing on, on Ink?

Just that, I mean, we are recording this like as launching, right? So inkonchain.com, Ink on Chain is the Twitter. And, you know, we have that Hacker House on November 11th. That's when we launch testnet. So like go RSVP, sign up. If you're in DevCon, uh, we'd love to meet you. And this is, this is beautiful. I, we spent so much time doing this.

This is such a nice landing page. I love this.

This is, we had, uh, like for this vibe and this look, um, just for like in some internals on this, we had, uh, many weeks of like this really cool art, art kind of critique session where we were all like getting really philosophical with it, where each of us had like 10 minutes to kind of like share like what images made you feel and all that. It felt like we were all in art school. It was amazing. Even the engineers, they were opening up and like getting their kind of thoughts out there, how we wanted this to look. It was such a fun process.

What is this design called? These little blobs? Like, what's the backstory of this? What's the backstory of the design? How did you pick this?

Internally, we call it the Morpheus. So it's the Morpheus blob, but it's, it's really like You know, we, when we came up with Ink, it was always like, you know, the tagline kind of like Ink the future, be able to like, you know, ink your transactions on chain, you can, you know, create anything you want with Ink, you can make art, you can write things. So naturally, we just kind of evolved it into like, okay, Ink isn't just for writing and drawing, you can also like splatter it, you can just be as creative as you want with it, right? It's like the pen is mightier than the sword of the old old days. I think that's what we got here. And, you know, it's a form, it's a blob. You can do so many things with it.

It's very like liquid metal. Yeah. Yeah.

Very nice.

Kind of like Terminator 2, like the—

Oh, yeah, yeah.

Yeah.

The self-healing blobs. You got to click dark mode, though. It's down in the lower left on your screen. You got to click that, too.

It's pretty.

Where do you see it? Oh, very pretty. All right, go check it out. Inkonchain.com. If you're listening to the podcast and you're like, why are these guys talking about this? Okay, maybe we can wrap with a prediction, which is in 5 years— and Hilmar, this is a Kraken-related question, but Hilmar, I'll ask you this as well. In 5 years, what percentage of the— of Kraken's trading volume will come from on-chain versus from the centralized exchange?

Geez, it's hard to give like specific numbers. I can definitely give my, my, my hope is that, okay, it's close to 100%. And you know, it's like, what's your realistic prediction?

Like, and you know, this is, this is Andrew's opinion, not Kraken's, all the disclaimers and all that kind of stuff. What is your—

Yeah, I would love it if you know, taking a step back on just like users, if it was like 5 to 10% of our users a year to 2 years from now are using the, the InkChain, and they are, you know, they have really easy rails to get on from the Kraken platform. I would love to see, you said 5 years, right? I would love to see like a 20% on-chain at least in 5 years. I know that's a little like may sound pessimistic, but to me, that would be That would be amazing. If it was more than that, great.

I'm a bit more bullish. I think 10% is right now DEX versus CEX volume in general, I think.

14% today.

14% today. I'm hopeful that, like, for me, what are the bottlenecks really? Scalability is a huge bottleneck. Like, having order books and stuff on-chain is just not feasible. Also today on InkChain, it won't be feasible to just have everything come on-chain.

Chain.

And 5 years from now, I'm pretty, pretty hopeful that this will actually be the case. So I think the advantages will outweigh the disadvantages of really not having it. So I think probably even 70%, 80%, I could see. In general, I think CeFi DEX volumes, and I think for you guys, it will be the same.

I'm more in Hillmore's camp. By the way, so we went from 0%. So when did DEXs start? I mean, you could say it's like, let's call it April, May 2020. When like we started to get actual volumes. Obviously there's like 2017, but like real volumes on DEXs, like what, April, May 2020. Today we're at 14%. I would guess we ripped through 20% this cycle. I would guess we could end this cycle even above 25%.

Yeah, I could. I mean, overall, I can definitely see after the cycle, like overall it's 20% for Kraken, like a little bit of a little bit of insight on like, you know, if you have old deposit addresses that come from like, say, 2015, and you rotate them, and you kind of expire them for old clients, and you say, like, you know, go ahead and grab a new address. In 2024, people will still deposit, you know, to the old addresses that have been expired. And so we still maintain that infrastructure. So you can do that. So nothing against, you know, like the grandma that's still like doing that, but like, I should be a little bit more, I think, optimistic that people will kind of go on-chain. And it's just like, you got to— that's why we got to make that good UX, the good dev tools, the good education, and just make it so that hopefully users don't even know they're going on-chain.

I think it will be pricing, right? So if you get on-chain better pricing that you get on your centralized exchange, then you have like KYC, AML figured out. Your user will be prompted with, hey, do you want to do on-chain? They shouldn't even be prompted, right? They should just like get the best price. And if the best price is actually on-chain versus off-chain, then I think the order should get on-chain.

That's easy. Yeah. Market wins.

Yeah. Yeah. I mean, you can even see like the sexes take more. I pulled up this dashboard of the staking providers after I asked that question. And you can actually— the interesting line item here, I think, is— or the column is ETH earned. So you guys have actually earned the fourth most ETH from this, but like Figment, Kiln, EtherFi have more ETH staked on their pools than you guys, but they've earned way less ETH. And I think the reason for that is like there's these— and like Rocket Pool, uh, I was going to say the reason for this is because there's, um, the decentralized platforms take lower fees. Than CEXs. So you're basically paying— today there's a premium that the CEXs can take for security because it feels safer to hold your money with Kraken than it does to move on-chain. But I think that security premium ultimately trends down to zero over the next several years.

I think so. Yeah, I think that's, that's why, that's why we're kind of keeping security as a top theme too. So like, if we can, if we can bring our talent to make sure that InkChain feels like you're using a centralized exchange, then, you know, you've won.

Yeah, I think that's smart. Andrew, I know it's a busy day. Congrats on the launch. Hilmar, congrats on helping Kraken with this and making it possible. And yeah, thanks to both you guys for coming on the show.

Thank you so much.

Thanks.

Hey everyone, thanks for watching today's episode. Just wanted to quickly thank today's title sponsor, SKALE. SKALE really is one of the best chain experiences out there today, and I've used so many different chains there's a reason they are gaining so much adoption in both gaming and AI use cases. Hit the link in the show notes to explore the SCaLE ecosystem.