What if your financial platform could access the best of decentralized finance (DeFi) and traditional financial services without the risks of centralized exchanges (CEXs) or the limitations of decentralized exchanges (DEXs)? Kinto, a Caldera-powered rollup on Ethereum, delivers this vision as the first Modular Exchange (MEX). Built on decentralized technology with non-custodial wallets and fintech-level UI/UX, Kinto offers the best features of CEXs like fiat onramps and account recoverability without becoming a honeypot for users’ private information. Caldera’s Rollup Engine powers this innovation, providing customizable infrastructure for a seamless, secure financial hub. This article explores Kinto’s rise as a MEX, the role of appchains in financial services, the benefits of building on Ethereum, and why Caldera is the ideal platform for modular exchanges.

Powering Real-World Assets and Other Traditional CEX services with Kinto

Kinto is an Ethereum Layer 2 launched in 2024, redefining the exchange landscape as the first Modular Exchange (MEX). Unlike CEXs like Coinbase, which charge high fees and hold user funds, or DEXs like dYdX, which lack compliance features for institutional use, Kinto integrates the best DeFi and financial protocols into a single, secure platform. Built on Arbitrum’s Orbit stack, Kinto settles on Ethereum Mainnet with a fully compatible EVM, modified to revert transactions from non-KYC’d addresses, ensuring compliance and an additional layer of security for a wide range of assets.

Kinto’s MEX architecture comprises several layers, each leveraging leading protocols and supported by Caldera’s infrastructure. It provides fiat-to-crypto onramps for seamless entry. An identity layer enforces KYC/AML while keeping user data private through a user-owned model, ensuring personally identifiable information is not linked to on-chain addresses. A non-custodial smart wallet offers full recovery and insurance, enhancing security. Account abstraction abstracts gas costs and simplifies user experience with password-free onboarding. A chain abstraction layer connects Kinto to Ethereum, Arbitrum, Base, and Hyperliquid, enabling seamless cross-chain swaps. Finally, a custom L2 rollup ensures gasless transactions and compliance.

This modular design allows Kinto to offer a broad spectrum of services without rebuilding them. Users can swap on Uniswap, lend on Aave, stake on Lido, trade perpetuals on Hyperliquid with up to 50x leverage, and access real-world assets (RWAs) through protocols like Dinari, Mountain Protocol, and Paxos—all through a single Kinto wallet. RWAs are traditional financial instruments like stocks, bonds, or real estate, tokenized on the blockchain, enabling 24/7 global market access and use in DeFi protocols, such as collateral in lending or trading in automated market makers (AMMs). Kinto offers tokenized equities such as the S&P 500 Index, Nvidia, Tesla, Coinbase, and MicroStrategy, merging the familiarity of traditional markets with DeFi innovation. 

Kinto focuses on security with native wallet insurance, full account recovery, and chain-level KYC, making it significantly more secure than traditional rollups or CEXs. Governance is decentralized, with nine elected Guardians voted on by $K token holders every six months. The $K token, set to list on March 31, 2025, facilitates this experience by enabling governance participation and access to network features.

Kinto’s cross-chain liquidity engine, Musubi, launched in October 2024, has enabled significant activity, such as a KYC’d institution lending 4M USDC on Aave via their Kinto wallet. This transaction allowed the institution to execute a fully legally compliant lending operation on another chain through Kinto, showcasing its ability to bridge compliant financial activity across networks. 

Kinto Network Transaction:
https://explorer.kinto.xyz/tx/0x582314c52b9cec7a972f22ef540d5f0520b70a36ba26eec271eca7fa23522241

Ethereum Mainnet Transaction:
https://etherscan.io/tx/0x3a01bc8385f3ad38c41aa83d04c01656c4ed634b4cbfdb68cbe0ad24c46f76c8

As of March 26, 2025, Kinto’s TVL stands at over $34M USD, with 3,300+ transactions recorded that day. Since launch, Kinto has processed over 1.5M total transactions and attracted over 150,000 unique wallet addresses. The platform has grown rapidly, with a 180% increase in verified users, from 40,000 to over 75,000 during January 2025, and a fivefold increase in transactions during the last quarter of 2024. 

Caldera’s Strengths

Caldera powers over 100 rollups, having processed over 410M transactions and accessed by almost 12 million unique wallets as of March 26, 2025. Our customizable Layer 2 infrastructure offers high throughput, low costs, and interoperability through the Metalayer. Caldera enables Kinto’s MEX vision by making its modular infrastructure possible. The custom L2 rollup ensures gasless transactions and compliance for financial services. 

The Metalayer provides two key benefits for Kinto. First, it allows Kinto to access liquidity from other Caldera chains, beyond just Arbitrum Nitro chains or Ethereum Mainnet, expanding its ecosystem with deeper liquidity across more rollup networks, a critical advantage for a DeFi hub. Second, the Metalayer facilitates other rollups requiring KYC by prompting Kinto to verify users on their behalf, positioning Kinto as the KYC verifier for multiple rollups in the Caldera ecosystem. Caldera also reduces development overhead, allowing Kinto to focus on integrating leading protocols like Hyperliquid, which allowed Kinto to recently enable perpetuals trading. 

“Caldera has been the perfect partner, since day one they have shared their expertise allowing us to iterate quickly - we see them as part of the Kinto team. Now the partnership is about to enter another level as we intend to be in the first generation of rollups connected to the Metalayer providing Kinto’s value to others in the Caldera ecosystem.” - Victor Sanchez, CTO & Co-Founder of Kinto

Why Ethereum?

Ethereum provides unmatched security, liquidity, and regulatory familiarity for financial services. Its robust consensus mechanism ensures the integrity of high-value transactions, critical for tokenized assets. Ethereum’s $100B+ DeFi ecosystem offers deep liquidity, enabling Kinto to integrate with protocols like Aave, Curve, and Lido. Regulators are familiar with Ethereum’s framework, reducing compliance friction for institutional adoption. Kinto leverages these strengths, settling on Mainnet to align with the need for trust and stability, while Caldera’s infrastructure ensures scalability and cost efficiency.

Why The Modular Exchange Needed an Appchain

General-purpose Layer 1s and Layer 2s like Ethereum or Arbitrum lack native KYC and compliance mechanisms, posing risks for institutional financial services, such as exposure to sanctioned funds. Bridging inefficiencies and high costs also hinder asset integration, with delays and fees disrupting user experience. Appchains address these issues. Kinto’s chain-level KYC, supported by Caldera, ensures Sybil resistance and compliance, allowing secure handling of tokenized ETFs or corporate debt. Custom rollups support specific needs, such as real-time AML monitoring. Unlike CEXs, Kinto offers non-custodial support; unlike DEXs, it provides AML compliance; and unlike traditional wallets, it integrates trading and onramps. With over 1.5M total transactions and over 150,000 unique addresses, Kinto demonstrates how appchains overcome general-purpose chain limitations for financial services.

The DeFi Future with Caldera-Powered Modular Exchanges

Kinto’s vision as a Modular Exchange aims to enable composability between DeFi and traditional financial products, such as tokenized ETFs providing liquidity in AMMs or banks issuing mortgages using on-chain collateral. On March 27, 2025, Kinto achieved a significant milestone by becoming a Stage 1 AppChain, as recognized by L2BEAT, marking its commitment to transparency, decentralization, and security. This status, achieved through a robust proof system, five independent validators, a publicly disclosed Security Council, and user exit mechanisms, positions Kinto as a leader in secure, compliant rollups. Kinto plans to advance further, targeting Stage 2 by implementing fully decentralized fault proofs in a future hard fork, enhancing its decentralization and trustlessness. 

As traditional institutions like BlackRock tokenize assets, a DeFi boom looms on the horizon. Caldera positions future modular rollups for success by offering rapid deployment, as seen with Kinto’s growth to over 1.5M total transactions and over 150,000 unique wallet addresses. Supporting 83 unique tokens, Kinto demonstrates its ability to handle a diverse range of assets, from DeFi to traditional finance. Caldera’s infrastructure ensures cost efficiency, with Kinto spending just 0.052 ETH in transaction fees over 24 hours, alongside compliance support critical for KYC and AML needs. 

The Metalayer enhances liquidity and interoperability by connecting rollups to DeFi ecosystems. While CEXs like Coinbase require 3,600 employees for a $72 billion valuation, Kinto’s lean model achieved 75,000 verified users with just $7 million raised, showcasing Caldera’s ability to reduce overhead. Caldera’s Ethereum integration drives a unified financial superchain, making it the ideal choice for projects aiming to become Modular Exchanges. What could your financial platform achieve with the seamless connectivity and compliance of a Caldera-powered Modular Exchange? Teams can visit Caldera’s deployment page and explore the Metalayer preview to start building today.