Crypto platform Kraken is offering customers an easier way to earn yield on their bitcoin holdings without selling or actively managing assets across decentralized finance (DeFi) protocols.
The Bitcoin Vault product within Kraken Earn allows users to win rewards denominated in bitcoin while maintaining exposure to BTC’s price. It is aimed at long-term holders looking for passive income opportunities tied to assets they already plan to keep over time, Kraken said in the Wednesday press release.
The new offering is powered by DeFi infrastructure provider Veda and operated by Sentora, with customer assets allocated across established onchain lending and yield protocols including Aave, Morpho and Tydro.
“Many bitcoin holders on Kraken have made it clear they want simple, safe ways to earn on the bitcoin they already plan to hold,” John Zettler, GM of Payward Services and head of Kraken Earn Products, said in the statement. “Bitcoin Vault is built for that mindset," he added.
The structure is intended to abstract away much of the operational complexity typically associated with DeFi participation, allowing customers to access yield opportunities directly through their Kraken accounts.
In crypto, vaults are pooled investment products that automatically deploy users’ assets across DeFi protocols to generate yield. Rather than requiring users to manually move funds between lending, staking or liquidity platforms, they package those strategies into a single product, often with automated risk management and rebalancing.
Crypto exchanges and DeFi firms have increasingly rolled out vault products as demand grows for passive yield opportunities tied to long-term holdings like bitcoin and ether.
Bitcoin Vault marks the latest step in Kraken’s broader push into onchain financial products as exchanges compete to attract users seeking yield-generating strategies beyond spot trading. While centralized crypto lending products largely collapsed during the 2022 market downturn, exchanges and DeFi platforms have increasingly repositioned yield products around transparent onchain infrastructure and overcollateralized lending markets.
Kraken said the product is designed to appeal both to existing customers and to bitcoin holders outside the platform who may be looking to consolidate assets with a large exchange while generating additional yield. The company added that onboarding into Bitcoin Vault is integrated directly into the Kraken and Krak apps.
The firm's broader DeFi Earn offering has surpassed $240 million in assets under management since launching in January, which it attributed to organic customer adoption rather than token incentives.
Bitcoin Vault is now available in eligible jurisdictions through Kraken Earn.
Read more: Kraken parent Payward's Q1 revenue climbs despite crypto market slump