Kraken Bitcoin Vault targets $240M in DeFi yield for BTC holders

Kraken's new Bitcoin Vault lets long-term BTC holders earn yield without selling their bitcoin, tapping into $240 million in DeFi infrastructure.

Kraken launched Bitcoin Vault, a yield product that lets BTC holders earn rewards while keeping exposure to the asset's price, the exchange said Wednesday.

"Many bitcoin holders on Kraken have made it clear they want simple, safe ways to earn on the bitcoin they already plan to hold," John Zettler, general manager of Payward Services and head of Kraken Earn Products, said in a statement.

The product is powered by DeFi infrastructure provider Veda and operated by Sentora, with customer funds allocated across lending protocols including Aave, Morpho and Tydro on Ethereum. Kraken's broader DeFi Earn offering has surpassed $240 million in assets under management since launching in January, the company said, attributing growth to organic customer adoption rather than token incentives.

The vault structure abstracts away the operational complexity of DeFi participation, allowing customers to generate yield directly through their Kraken accounts. The product is now available in eligible jurisdictions through Kraken Earn.

Competitive pressure builds in exchange yield products

Kraken's move comes as crypto exchanges increasingly compete to offer yield-generating strategies beyond spot trading. In February, derivatives exchange Grvt integrated Aave to let traders earn yield on margin collateral while keeping perpetual futures positions open. The broader push follows the collapse of centralized crypto lending products in 2022, with exchanges now repositioning yield offerings around transparent onchain infrastructure and overcollateralized lending markets.

The product is aimed both at existing Kraken customers and bitcoin holders outside the platform who may consolidate assets with a large exchange while generating additional yield, the company said. Onboarding is integrated directly into the Kraken and Krak apps.

What to watch

Users must weigh yield benefits against smart contract risk and withdrawal conditions. The product's reliance on protocols like Aave and Morpho means returns depend on onchain lending demand, which fluctuates with market conditions. Kraken did not disclose a specific yield target or cap for the vault.

This article is for informational purposes only and does not constitute investment advice.