Krakens have been shown in Sea of Thieves promotional images to be similar to the Krakens of sea folklore, being giant squid-like creatures that attack ships from under water with their enormous tentacles. While the material released concerning the Kraken have been short and largely obscure, it seems to be greater than the size of some of the larger ships in the game, possibly as large as the Galleon.
The Kraken ascends from the depths to surround ships. It's arrival is forewarned by the sea turning black around your ship. The sea continues to be black in the surrounding area until the Kraken has been defeated, preventing any players from jumping into the water and viewing the creature's full body, the appearance and shape of which is unknown.
The Kraken attacks both your ship and player characters. It attacks your ship by wrapping a tentacle around the ship, with the bulk of the tentacle laying across the deck. This attack will cause holes to appear in your hull at a rapid pace.
The Kraken attacks player characters by opening maws on the ends of tentacles and sucking players into them. This can be avoided by going below deck when wind indicators show air flowing towards the maw.
The Kraken can be defeated by damaging all of the tentacles with ranged weapons or swords when a tentacle is attacking your ship.
Krakens did not spawn in any of the pre-release versions, including the Final Beta, but were shown in teaser trailers for the full release.