Kraken‘s (part of parent entity Payward) Layer 2 blockchain, Ink, recently has deployed Tydro—which is described as a custom lending platform built on Aave’s technology. This initiative highlights how established infrastructure can accelerate secure DeFi growth within new ecosystems, drawing significant liquidity and enabling improved user experiences (UX) for Kraken’s large customer base.
Ink, an Ethereum-compatible Layer 2 network developed on Optimism’s Superchain with the OP Stack, went live on mainnet toward the end of 2024.
Developed by the crypto exchange and digital investment platform Kraken, it aims to introduce millions of users to decentralized finance by providing a more accessible on-chain environment.
From the outset, the Ink Foundation identified lending as a core building block for ecosystem expansion.
A frictionless borrowing and lending market acts as a central hub of liquidity, supporting everything from trading and yield-generating strategies to enhanced financial applications and efficient settlements.
To roll out this essential service without starting all from scratch, the Foundation opted for a white-label version of Aave V3, rebranded as Tydro.
Launched in October of last year, Tydro basically functions as Ink’s primary decentralized, non-custodial lending and borrowing hub.
It integrates with the Ink network, incorporating incentives tied to the INK token, a selective group of assets, and future connections to Kraken’s exchange offerings.
By adopting Aave’s codebase through a commercial arrangement, Tydro gained =benefits in development developer tools, security audits, and overall viability.
Aave’s risk management team provided ongoing support for maintenance, parameter tuning, and optimization during the early phase.
This strategy channeled more capital into the network, leading to a rise in on-chain activity shortly after launch. In its initial four months, Tydro demonstrated steady positive momentum and resilience during market fluctuations.
It reached peak figures of approximately $600 million in total deposits and $350 million in total value locked (TVL), accounting for the bulk of liquidity across the entire Ink ecosystem.
The platform prioritizes high-utility assets linked to Kraken’s offerings, such as kBTC (Kraken’s wrapped Bitcoin) and USDG (a stablecoin backed by a consortium including Kraken).
This focus strengthens interoperability and ties within the broader Kraken environment.
Tydro has progressively added support for additional assets, including those related to Ethena and staked ETH derivatives.
These enable strategies like leveraged staking and stablecoin yield optimization, further enhancing utility for digital assets ecosystem participants.
Tydro is positioned for integration into Kraken‘s products, allowing users to access DeFi features within the exchange interface.
This vertical integration across on-chain and application layers helps onboard newcomers by eliminating common hurdles like wallet management or bridging.
It represents a trend of embedded DeFi, where different centralized platforms incorporate decentralized primitives to deliver more accessible and simplified services.
A key example emerged in January 2026 with the introduction of Kraken DeFi Earn. This offering lets users generate yield on USDC holdings, powered behind the scenes by Tydro and Aave.
Participants choose from several vault options that are being managed by Veda, and the product has attracted more than $200 million in on-chain deposits, highlighting steady demand.
For Aave, the collaboration expands its reach by routing institutional and CeFi liquidity into its markets, supporting its position in hybrid CeDeFi models.
It opens doors for additional products such as crypto-collateralized loans and enhanced staking yields.
For Kraken and Ink, it encourages user-base loyalty and paves the way for various offerings built around native tokens like kBTC or USDG.
Tydro’s roll-out on Ink underscores the potential of resilient DeFi infrastructure to support secure launches in newer, emerging chains. By bootstrapping substantial liquidity and enabling embedded applications, it drives steady adoption while providing institutional validation of Aave‘s capabilities.