Kraken Now Lets You Earn Yield on Bitcoin Holdings via Lending Vaults
Kraken has launched a new feature called “Bitcoin Vault,” allowing users to earn up to 2.5% APY in Bitcoin-denominated rewards by locking their BTC on the exchange. Funds are deposited into on-chain vaults managed by DeFi infrastructure firm Veda, with institutional DeFi firm Sentora overseeing risk and strategy. These vaults utilize established on-chain protocols such as Aave, Morpho, and Tydro for lending and borrowing to generate yield. Kraken and its partners collect a 25% performance fee from rewards; the advertised yield is net of this fee. Users can start earning quickly, with withdrawals requiring up to five days for processing. Kraken emphasizes that the yields come from actual on-chain activities, not promotional rates. The introduction reflects a growing demand among Bitcoin holders for simple, accessible ways to earn yields without added complexity, amid past controversies and regulatory scrutiny over similar products at other centralized exchanges.
