Kraken, the established U.S. crypto exchange, has unveiled a new product on its Kraken Earn platform called Bitcoin Vault. Announced Wednesday, the product allows Bitcoin holders to earn BTC-denominated rewards through DeFi strategies without giving up price exposure. Aimed at long-term investors who want passive income, it simplifies participation in decentralized finance.
Streamlined DeFi: Automated Allocation to Top Lending Protocols
Typical DeFi involvement requires managing private keys, bridging assets across chains, and manually shuffling funds between protocols. Bitcoin Vault eliminates those hurdles. Powered by DeFi infrastructure provider Veda and operated by Sentora, the service automatically distributes user funds to established on-chain lending and yield protocols, including Aave, Morpho, and Tydro.
John Zettler, Managing Director of Kraken Payward Services and Earn product lead, said: “Many Bitcoin holders on Kraken have clearly expressed a desire for a simple, secure way to earn yield on Bitcoin they intend to hold long-term. Bitcoin Vault was built precisely for that mindset.”
From CeFi Turmoil to Transparent On-Chain Infrastructure
The launch marks a strategic shift for exchange-based yield products. After the 2022 market collapse of opaque centralized lending platforms (CeFi), exchanges are rebuilding trust by anchoring products in transparent, overcollateralized on-chain lending markets. Kraken says Bitcoin Vault is fully integrated into the Kraken and Krak apps, aiming to serve both existing users and external Bitcoin holders looking to consolidate assets on a major exchange while earning extra yield.
Demand for such hybrid products appears strong. Kraken reported that its broader DeFi Earn service, launched in January without any token incentives, has organically grown its assets under management (AUM) to over $240 million. Bitcoin Vault is now live in eligible jurisdictions.