Kraken launches xStocks vaults with yields on tokenized stocks
Kraken has introduced three xStocks vaults, enabling eligible non-U.S. customers to earn variable yields on tokenized versions of Nvidia shares (NVDAx) and two U.S.-listed ETFs (SPYx and QQQx). These vaults utilize a complex DeFi strategy where deposited assets are moved from Kraken’s Ink layer-2 network to Solana, where they serve as collateral in the Kamino lending market. The generated yields, currently estimated at 2% for SPYx and QQQx and 1.8% for NVDAx, are reinvested into the vault balance after a 25% performance fee. This product highlights the growing trend of bridging traditional equity exposure with decentralized finance yield-generation mechanisms. However, the vaults carry significant risks, including potential liquidation, cross-chain execution failures, and the lack of traditional shareholder rights like voting or dividends. Kraken emphasizes that these tokens are not equivalent to brokerage-held securities and are not insured by government programs. The launch underscores Kraken's ongoing expansion into on-chain securities infrastructure following its previous initiatives with xStocks and planned acquisitions in the sector.