Kraken adds DeFi revenue to tokenized stocks and ETF assets

Kraken launches an on-chain revenue vault to support tokenized stocks and ETFs to earn revenue

Kraken recently launched a new Onchain Yield Vaults, which allows eligible customers to obtain investment returns when holding tokenized stocks and exchange-traded funds (ETFs). The exchange said its xStocks vault will lend out deposited assets through a decentralized finance (DeFi) protocol and distribute the resulting proceeds to users in the form of additional xStocks.

Kraken clearly pointed out in Monday's announcement that the first batch of assets supported by xStocks vault include the tokenized version of the SPDR S& P500 ETF (SPYx), the tokenized version of the Invesco QQQ ETF (QQx), and Nvidia's tokenized shares (NVDax). Withdrawal requests will be processed within three working days, and proceeds will be paid in the form of deposited tokens.

Core Points

• Revenue Generation Mechanism: Kraken's xStocks vault generates revenue by lending tokenized stocks and ETFs in the DeFi market.
• Supported Assets: Currently supports SPYx, QQx and NVDax, with proceeds paid out in the form of deposited xStocks.
• Withdrawal cycle: Kraken stated that the treasury withdrawal processing time is three days.
• Infrastructure background: These vaults are built on top of Kraken DeFi Earn's infrastructure, a project launched in January this year and has reportedly attracted more than US$800 million in deposits.
• Regional restrictions: xStocks Treasury is only available in the European Economic Area (EEA) and some other jurisdictions, and is not covered in the United States, the United Kingdom, Canada, Australia and United Arab Emirates.

How Kraken's xStocks vault works

Kraken's new vault aims to turn exposure to tokenized stocks into a revenue-generating strategy. After customers deposit the supported xStocks, these assets will be lent through online lending platforms, with the proceeds coming from lending activities in these markets.

According to Kraken, this structure is similar to the existing Kraken DeFi Earn project, which went online in January this year. Kraken pointed out that DeFi Earn has attracted more than US$800 million in deposits since its launch, and the launch of xStocks vault is a move to expand the model into tokenized stocks. In addition, Kraken emphasized that withdrawals will be completed within three days. This detail is crucial for investors, because the differences in return products from tokenized assets lie not only in the way they are paid, but also in the frequency and timeliness of redemption operations.

DeFi Policy Design and On-Chain Execution

Kraken stated that the xStocks vault is supported by Veda. The company also assigned the Sentora team to design and manage lending strategies that work to generate revenue.

In terms of execution details, Kraken pointed out that assets will be borrowed through DeFi marketplaces such as Kamino on the Solana network. Sentora is responsible for setting a cap on risk exposure and monitoring key conditions, including collateral status, liquidity and oracle inputs-factors that often affect the safety and performance of lending strategies.

Although no further details were disclosed in the announcement, the combination of the platform side (Veda) and strategy manager side (Sentora) suggests a separation between custody/deposit processing and the dynamic risk management layer that determines how the treasury interacts with DeFi lending venues.

Broader trends in tokenized stocks

Kraken's move comes at a time of accelerating development of tokenized stocks and ETFs. Kraken cited data from RWA.xyz to show that the total market value of tokenized stocks has increased to approximately $2.84 billion from approximately $540 million a year ago.

This significant increase highlights the market's shift from an early experimental stage to a larger, more mature market for tokenized financial instruments. This also explains why centralized exchanges and regulated companies are increasingly interested in packaging tokenized assets into revenue products: Demand for tokenized exposure is rising, and the natural next step for many platforms is to provide revenue generation capabilities rather than just passive holding.

However, the economic models of these products may differ significantly. Under Kraken's model, the income mechanism is borrowing through the DeFi market, so performance depends on on-chain lending activities and treasury risk control measures-which is completely different from traditional stock dividends or fund dividends.

Service Areas and Availability Restrictions

Kraken stated that xStocks Treasury is available to qualified Kraken customers in the European Economic Area and other markets, but is excluded in the United States, the United Kingdom, Canada, Australia and United Arab Emirates.

To users, these geographical limitations are often as important as the underlying product design. Tokenized stocks have come under increasing regulatory attention in various jurisdictions, and the scope of exchanges 'services often reflects local licensing requirements, investor qualification requirements or product classification.

In practice, this means that European and some international customers may receive earnings from tokenized shares linked to DeFi earlier, while customers in excluded regions will need to wait for further regulatory clarity or product adjustments.

As Kraken expands its xStocks business, market participants may be watching whether vaults can attract substantial deposits beyond the size of the existing DeFi Earn base, and how tokenized stock liquidity and on-chain borrowing needs will evolve. The next question for investors is whether earnings production will remain consistent as tokenization grows-especially given the three-day redemption time and reliance on DeFi borrowing conditions.