Kraken has launched three xStocks vaults that allow eligible clients to earn variable yield on SPYx, QQQx and NVDAx while keeping exposure to the tokenized equity or exchange-traded fund they deposited.
The vaults currently show estimated net APYs of 2% for SPYx and QQQx and 1.8% for NVDAx. Kraken takes a 25% performance fee on vault earnings, and the displayed rates are already net of that charge. Rewards are converted into the same xStock and automatically compounded into a client’s balance.
Sentora said it designed the strategy and curates its risks. Veda provides the vault infrastructure.
How the product works
When a client allocates an eligible xStock, Kraken sends it to an embedded self-custodial wallet on Ink, wraps it for vault accounting and deposits it into a Veda vault. Kraken says Sentora serves as the vault’s risk manager, Veda acts as administrator, and Kraken offers access without controlling the underlying strategy or protocols.
Sentora then bridges the wrapped xStock to Solana and uses it as collateral in Kamino lending markets. The strategy borrows stablecoins against that collateral and deploys the borrowed funds into selected DeFi strategies. Returns are swapped back into the deposited xStock, which means a SPYx depositor accrues more SPYx instead of receiving cash or stablecoins.
The product places an onchain credit strategy inside Kraken’s interface. Clients do not need an external wallet or seed phrase, although Kraken says the private key for the embedded wallet can be exported. Deallocation can be requested at any time, but the xStocks return to the client’s Kraken balance only after a three-day waiting period.
xStocks move past trading
The launch extends xStocks beyond trading use cases. In March, The Defiant reported that xChange enabled cross-chain trading for more than 70 tokenized stocks across Ethereum and Solana. The new vaults support only SPYx, QQQx and NVDAx at the outset, and execution runs through Ink and Solana.
The strategy uses leverage
Kraken’s support documentation says the vault strategy uses leverage by borrowing stablecoins against xStock collateral. The client keeps an xStock-denominated position, rather than multiplying directional equity exposure, while the underlying structure takes on debt to produce yield.
That setup introduces risks beyond simply holding an xStock. Kraken lists smart contract risk, liquidity risk, bad-debt risk, liquidation risk, cross-chain execution risk and downstream-asset risk. If xStock collateral drops sharply or withdrawal demand rises quickly, positions may need to be closed fast. Any resulting losses are shared proportionally among vault users and can cut into the original deposit.
Kraken also says withdrawals can be delayed during periods of heavy demand or market stress if liquidity is not immediately available. Rewards are not guaranteed, and the product is not covered by any government or bank protection program.
No ownership of the underlying shares
Kraken’s risk disclosure says that “full equity exposure” refers to economic exposure through the token, not ownership of the underlying shares. xStock holders have no voting rights, no distribution entitlements and no legal claim to the underlying stock.
They also face operational and credit risks tied to Kraken, issuer Backed and the institutions holding the backing assets.
Availability at launch
Kraken says the vaults are available at launch in the European Economic Area and other supported markets, but not in the U.S., UK, Canada, Australia, UAE or sanctioned countries.