Kraken launches xStocks vaults with yields on tokenized stocks

Kraken announced the rollout of three xStocks vaults that let eligible users earn on‑chain yields on tokenized versions of the SPDR S&P 500 ETF (SPYx), the Invesco QQQ Trust (QQQx) and Nvidia shares (NVDAx). The vaults display estimated net annual percentage yields (APYs) of 2% for SPYx and QQQx and 1.8% for NVDAx during the initial launch period.

How the vaults work

When a customer deposits an eligible xStock, Kraken moves the token to an embedded self‑custody wallet on its Ink layer‑2 network, wraps it for accounting, and transfers it to infrastructure provided by Veda. The wrapped token is then moved across chains to Solana, where it is used as collateral in the Kamino lending market to obtain a stablecoin loan. The borrowed stablecoins are deployed into selected DeFi strategies that generate the vault’s return. Proceeds are converted back into the original xStock and automatically reinvested, so users do not need to claim or redeploy rewards manually.

Fees and returns

• Kraken charges a 25% performance fee on earnings; the fee is already deducted from the displayed APY.
• Deposits and withdrawals incur no additional platform or Ink network gas fees.
• Returns accrue continuously and are paid in the same xStock that was deposited.
• The quoted APYs are variable, based on the previous seven days of stablecoin borrowing demand.

Risk considerations

The strategy involves leverage, which can amplify both gains and losses. Risks highlighted by Kraken include liquidation, bad debt, smart‑contract failures, liquidity shortages, cross‑chain execution issues, and exposure to stablecoin peg loss. Losses from liquidation or severe market moves are shared proportionally among vault participants, and neither the principal nor the rewards are insured or guaranteed.

Access and eligibility

The vaults are available to customers in the European Economic Area and other supported jurisdictions, excluding the United Arab Emirates. Residents of the United States, United Kingdom, Canada, Australia, and sanctioned countries cannot use the product. Withdrawals are permitted at any time but are subject to a three‑day waiting period for the xStock to return to the user’s Kraken balance.

Token holder rights

Although SPYx, QQQx, and NVDAx track U.S. listed securities, token holders do not receive voting rights, dividend rights, or any legal claim against the underlying company or fund. Kraken advises users to seek independent tax guidance, as the tax treatment differs from holding the securities through a traditional brokerage.