Kraken Launches Tokenized Stock and ETF Vaults for DeFi Yield

Kraken has launched a new product enabling users to generate income by lending tokenized U.S. stocks and ETFs in the DeFi market. The service, called xStocks Vaults, moves beyond simply holding tokenized assets to utilizing them within on-chain finance.

According to CoinTelegraph, supported assets include SPYx (tokenized SPDR S&P 500 ETF), QQQx (tokenized Invesco QQQ ETF), and NVDAx (based on NVIDIA stock). When users deposit their xStocks into the vault, they earn rewards through on-chain management, with returns paid in the same xStocks for automatic reinvestment. Withdrawals require a three-day waiting period.

The structure is more complex than simple lending. Deposited xStocks flow through Kraken's Ink network and non-custodial internal wallet to Veda Vaults, where they are supplied as collateral for loans in DeFi protocols, generating stablecoin loans that are then deployed into yield-generating strategies. Veda provides the vault infrastructure, while Sentora manages asset allocation, collateral, liquidity, and oracle risks.

Initial estimated annual yields after fees are 2.0% for SPYx and QQQx, and 1.8% for NVDAx. However, actual yields may fluctuate based on DeFi loan demand and are not guaranteed. There is also a risk of principal loss due to smart contract errors, insufficient liquidity, or defaulting loans.

The service leverages Kraken's existing DeFi Earn infrastructure, which has seen over $800 million (approximately 1.78 trillion KRW) in deposits since its launch in January. xStocks Vaults are available to eligible customers in the European Economic Area (EEA), but not in the U.S., UK, Canada, Australia, or UAE.

The tokenized stock and ETF market is growing rapidly. According to RWA.xyz, the circulating value has surged to approximately $284 million (about 3.8269 trillion KRW) from around $54 million (about 727.6 billion KRW) a year ago, representing more than a fivefold increase. Beyond price tracking, these assets are increasingly being used for lending, collateral, and yield generation.