Ink, the Ethereum Layer 2 solution incubated by Kraken and the Ink Foundation, is launching a crypto borrowing and lending protocol called Tydro. The platform is a custom-tailored, white-label instance of Aave v3 that supports the INK token.
According to the Ink Foundation, the platform will serve as “core infrastructure for DeFi on Ink.” Further, Kraken announced plans to integrate Tydro into its core centralized exchange product, “enabling clients to more seamlessly access DeFi opportunities.”
“The protocol will inherit Aave’s battle-tested lending engine while introducing $INK-based incentive structure designed specifically for Ink-native capital flows,” according to a statement on Wednesday.
INK will be used to bootstrap liquidity for the Tydro protocol and to reward early adopters. A representative for the initiative told The Block that “Tydro users will accumulate points that represent claims on the first airdrop … down the line.”
Tydro will initially support non-custodial lending markets for assets like wrapped ETH, wETH, and Kraken’s wrapped bitcoin, kBTC, as well as stablecoins like the Global Dollar-issued USDG, Tether-backed USDT0, and native Aave stable, GHO. Yield-bearing assets and liquid staking tokens are planned “for future deployments,” according to the release.
Aave, the largest onchain lending protocol and first to cross the $50 billion milestone in net deposits, reportedly accounts for over 50% of all onchain lending activity. It currently secures $75 billion in net deposits and $30 billion in active loans.
When first teased, the Ink Foundation, made up of anonymous directors, said the INK token would not “play a role” in network governance decisions and would instead be used for liquidity aggregation and to incentivize adoption of Ink-based applications, like lending and trading.
The Ink team also previously noted the blockchain’s first use case would be an Aave liquidity pool, which would function as a concentrated source of liquidity. Total value locked on Ink spiked following the announcement of the INK token, and currently stands near all-time highs above $140 million, according to Dune Analytics data.
In July, Kraken announced plans to integrate the INK token into its “core product suite,” including the Kraken Drops program that rewards users with airdrops. The exchange said it is considering going public as soon as the first quarter of 2026.
Rival exchange Coinbase (ticker COIN) last week rolled out DEX trading within its app for U.S. users, enabling users to trade Base-based assets ahead of a traditional listing process. That service sources liquidity primarily from 1inch and 0x pools.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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