Cross-Chain Swaps by leveraging Kraken liquidity

[RGPankO]

If you want to bring Bitcoin to Ethereum or USDT from one chain to another, you typically have to either use a centralized exchange or a bridge like Wormhole.

If Kraken could provide liquidity, people could leverage that to receive much lower fees when they want to do a swap. For example, if you want to transfer ETH from one blockchain to another using a bridge, you would need to pay multiple fees—including mainnet fees that can go north of tens up to hundreds of dollars.

During peak gas fees, it would be greatly beneficial to perform a swap where the user sends Kraken Mainnet ETH and receives back ETH on another L2, sidechain, or other L1. If there's trust involved, this would have to be mentioned in the Terms and Conditions, of course. However, a lot of people would use that for smaller amounts where it would be meaningful to save on fees.

Additionally, of course, a decentralized bridge transfer is needed. This is for people who want to hold their own keys and not be dependent on Kraken.

Ultimately this liquidity providing would not be for free and a small fee that is percentale based or a flat fee can be added on top of the blockchain service fees, so in the end this turns into a income stream for Kraken.