Kraken Launches Yield Vaults for Tokenized Stocks SPYx, QQQx, NVDAx
Kraken Introduces Yield Earning on Tokenized Stocks
Kraken has launched three new vaults that let eligible clients earn yield on tokenized versions of popular stocks and ETFs like SPYx, QQQx, and NVDAx. Clients can keep exposure to these digital assets while generating additional returns.
Key Features and Rates
- Estimated net annual percentage yield (APY) is 2% for SPYx and QQQx, and 1.8% for NVDAx.
- Kraken charges a 25% performance fee on earnings, which is already deducted from the displayed rates.
- Rewards are converted into the same xStock token and automatically compounded into the depositor's balance.
- Sentora designed the yield strategy and manages risks, while Veda provides the vault infrastructure.
Yield Comes from DeFi Lending
The vaults generate yield by taking deposited xStock tokens, wrapping them, and using them as collateral in lending markets on Solana. Stablecoins are borrowed against this collateral and deployed into DeFi (decentralized finance) strategies. Returns are then swapped back into the original xStock tokens, increasing the depositor's balance.
Kraken provides access to this strategy through an embedded wallet on Ink, but clients do not control the underlying protocols. Withdrawals can be requested at any time, but xStocks are returned after a three-day waiting period.
Risks and Fees Apply
The strategy involves leverage and carries several risks, including smart contract failures, liquidity issues, and potential losses from rapid price changes. Kraken states that losses are shared proportionally among vault users and can reduce initial deposits. Rewards are not guaranteed, and the product is not covered by government or bank protection programs.
Tokenized equities like xStocks do not provide voting rights or legal ownership of the underlying stocks. Holders face operational and credit risks tied to Kraken and other institutions.
Access and Regional Restrictions
The vaults are available in the European Economic Area and other supported markets. They are not accessible in the U.S., UK, Canada, Australia, UAE, or sanctioned countries.
