What is Ink (INK)? Achieving on-chain Capital Market through Kraken's second-layer network.

Overview of INK and Its Ecosystem

INK is a Layer 2 blockchain project initiated by Kraken and integrated into the Optimism Superchain, designed to support large-scale decentralized finance (DeFi) operations, including trading, lending, and structured financial products. In mid-June 2025, the Ink Foundation—a non-profit entity originating from Kraken—launched the INK token with a fixed supply of one billion units, aimed at enhancing on-chain capital markets and accelerating integration by Aave. Ink is not just another Optimism roll-up, but positions itself as an on-chain capital network. It connects Aave's liquidity engine with Kraken's backend and wallet ecosystem, allowing users to transition from centralized platforms to on-chain DeFi more easily and flexibly.

INK Token Economics and Distribution Mechanism

The total supply of INK is limited to one billion tokens, serving as a purely utility asset with no minting capability after its release. It is important to note that this token does not have governance functions; its sole purpose is to incentivize the use of the market and the protocol, rather than to provide voting rights. All tokens will be distributed through a comprehensive airdrop to early liquidity providers and protocol participants on Ink, aligning user incentives with the goal of initiating on-chain capital flows. Although the official minting and airdrop dates have not been confirmed, they are expected to take place between the end of the second quarter and the beginning of the third quarter of 2025, in line with the network launch milestones.

Uses and Market Potential of INK

INK is designed as a utility incentive token within the Layer-2 ecosystem. Its primary function is to reward users who provide liquidity, users who participate in lending, and users who utilize structured DeFi products built on the network. By integrating with Aave, INK aims to leverage established liquidity protocols to enhance capital efficiency and encourage deeper on-chain market activity. The INK Foundation expects that users receiving INK will help launch important liquidity pools, creating a self-reinforcing infrastructure to support ongoing market development without relying on governance utility or speculative demand.

Risks and Considerations

Despite its potential, INK faces several key risks: First, while the fixed supply of tokens limits inflation, the actual circulating supply after the airdrop remains unclear. Large-scale token distribution may lead to selling pressure, affecting price stability and liquidity. Secondly, as non-governance tokens, INK holders cannot influence protocol updates or operations — this may lead to reduced long-term community engagement compared to governance tokens. Finally, INK is still in its early stages. Its success depends on real-world adoption, user integration into DeFi pipelines, and the seamless deployment of Aave on optimized Layer-2 networks. The speed at which these milestones are achieved will determine the practicality and value of INK.

Frequently Asked Questions (FAQs)

What is INK?

INK is a utility token launched by Ink Foundation and Kraken, designed to incentivize participation in on-chain capital markets through integration with the Optimism-based Layer‑2 network and Aave protocol.

How many INK tokens are there, and how are they allocated?

The supply limit of the INK token is 1 billion. All tokens are distributed to early protocol users through a 100% airdrop to reward liquidity provision and network activation. No further minting will be possible in the future.

Is ### INK a governance token?

No, INK does not provide voting rights or control over the network. The protocol is managed solely by the foundation and is included in the governance structure of Optimism.

When will ### INK be distributed?

Token allocation is expected to take place at the end of the second quarter or the beginning of the third quarter of 2025, in accordance with network milestones. The exact timing has not yet been officially confirmed.

Does INK have growth potential?

INK shows potential due to its integration with Aave and Kraken Lighting Wallet, as well as its focus on real-world usability. However, its impact depends on user adoption, liquidity levels, and the maturity of the on-chain ecosystem.

Conclusion

INK represents a strategic effort aimed at building scalable and accessible on-chain capital markets through a Layer-2 network supported by Kraken and Optimism. With a fixed token supply, Aave integration, and comprehensive support for early distribution, INK aims to accelerate the launch of a diversified DeFi market. However, its success depends on adoption, liquidity dynamics, and network launch. As INK develops, monitoring how it effectively bridges centralized infrastructure with decentralized execution will become important — this could herald the arrival of a new era in the on-chain financial ecosystem.

Author: Blog Team *This content does not constitute any offer, solicitation, or recommendation. You should always seek independent professional advice before making any investment decisions. *Please note that Gate may restrict or prohibit the use of all or part of its services from restricted locations. For more information, please refer to the user agreement.