- Kraken launches Bitcoin Vault, offering up to 2.5% BTC yield through managed on-chain DeFi strategies.
- Bitcoin Vault surpasses $30M in deposits from nearly 4,000 wallets within 10 hours.
- Kraken converts BTC into kBTC and deploys it across Aave, Morpho, and Tydro protocols.
Crypto exchange Kraken has launched a new Bitcoin yield product offering users up to 2.5% annual returns on long-term BTC holdings without requiring direct interaction with DeFi protocols. The product, called Bitcoin Vault, operates through Kraken Earn and allows customers to maintain spot exposure to Bitcoin while earning BTC-denominated returns generated through on-chain lending and liquidity strategies.
The launch expands Kraken’s existing DeFi Earn framework, which already routes customer assets into decentralized lending markets through managed vault structures. According to the exchange, the Bitcoin Vault product automates the deployment of Bitcoin into curated DeFi strategies, eliminating the need for users to bridge assets, interact with external wallets, or manually move funds across protocols.
Kraken said the vault is built to simplify access to decentralized yield opportunities while keeping rewards tied directly to Bitcoin rather than stablecoins or governance tokens. The exchange stated that the strategies used within the product rely on audited DeFi infrastructure and are managed through automated allocation systems.
Bitcoin Vault Uses Wrapped Bitcoin Structure
Kraken’s product generates yield by converting deposited Bitcoin into Kraken Wrapped Bitcoin, or kBTC, a token created to mirror Bitcoin’s market value on-chain. The wrapped asset is then allocated by crypto platform Sentora across lending and liquidity platforms, including Aave, Morpho and Tydro.
The company said the vault remains non-custodial, meaning users retain control over withdrawals and transfers tied to their deposits. However, withdrawals are estimated to take up to 5 days to process. Service providers involved in the strategy also collect a 25% performance fee on the rewards generated.
John Zettler, head of Kraken Earn Products and general manager of Payward Services, said the exchange developed the product in response to demand from Bitcoin holders seeking simpler ways to earn yield on assets they intend to keep long term.
Deposits Cross $30 Million After Launch
Market interest in the product grew after launch. Around 10 hours after Bitcoin Vault became available, crypto infrastructure platform Veda reported that the vault had surpassed $30 million in Bitcoin deposits from approximately 4,000 unique wallets.
The launch also follows earlier growth in Kraken’s yield-focused products. The exchange said its three stablecoin yield vaults, introduced in January, have accumulated roughly $245 million in customer deposits and generated more than $2.2 million in yield since Jan. 26.
Related: Payward Earns VARA License in the UAE Enabling Kraken’s Regional Expansion
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