Kraken Launches xStocks Vault for Tokenized Stocks and ETFs in DeFi Lending

Kraken has launched xStocks Vaults, enabling users to deposit tokenized stocks and ETFs into DeFi lending markets to earn rewards. The product connects on-chain assets previously limited to trading to the on-chain lending market. Kraken announced support for SPYx (tokenized SPDR S&P 500 ETF), QQQx (based on Invesco QQQ ETF), and NVDAx (based on NVIDIA $NVDA) as of April 14.

Users deposit their xStocks into the vaults, receiving rewards in the same xStocks based on lending strategies. Withdrawals are processed within up to three days. The vault infrastructure is powered by Kraken's DeFi Lending Infrastructure (DeFi Lend), which has attracted over $800 million (approximately 1.743 trillion won) in deposits since its January launch. Binance handles the vault operations, while Centora designs and manages lending strategies, supplying assets to Solana-based DeFi markets like Camino.

Centora monitors collateral, liquidity, and oracle status, setting exposure limits per asset. Oracles provide off-chain price data for on-chain contracts, calculating collateral value and liquidation thresholds. Binance explains that each xStock is deposited into Kraken's Layer 2 network Ink before moving to Solana for use as collateral on Camino, where borrowed stablecoins are deployed in yield strategies with rewards converted back to the underlying xStock.

DeFi Vaults allow users to deposit assets into pre-designed smart contract structures without manually allocating to multiple lending or liquidity strategies. Returns vary based on market demand, liquidity, and collateral status. The product is available to eligible Kraken customers in the European Economic Area (EEA) and select international markets but excludes the U.S., UK, Canada, Australia, and UAE.

Binance warns that rewards are variable and not guaranteed, with potential loss of part or all of deposited assets—differing from traditional stock or ETF holdings. xStocks represent tokenized U.S. stocks and ETFs on-chain, with each token pegged 1:1 to the underlying asset for 24/7 trading in supported regions. However, tokenized stocks differ structurally from direct ownership, including no voting rights or cash dividends, as previously reported by this site.

This product expands tokenized assets' use cases beyond trading into collateral and lending. The market for tokenized stocks and ETFs has grown, with RWA.xyz reporting a decentralized ledger value of approximately $284 million (about 3.8141 trillion won) as of now, up from about $54 million (725.2 billion won) a year ago. However, market size does not equate to DeFi utilization; token issuance and trading differ from collateral supply in lending markets, making this launch an attempt to bridge that gap.