Kraken Launches xStocks Vaults That Borrow Against Tokenized Equities

Kraken has rolled out three vaults that allow eligible clients to earn variable yield on the tokenized equities SPYx, QQQx and NVDAx while maintaining exposure to the deposited tokens. The company markets estimated net annual yields around 2% for SPYx and QQQx and 1.8% for NVDAx; those figures are presented after a 25% performance fee that Kraken levies on vault earnings. Rewards are converted back into the same xStock and automatically compounded into the depositor’s balance. The vaults operate by transferring allocated xStocks into an embedded self-custodial wallet on Ink, wrapping them for vault accounting, and depositing the wrapped tokens into a Veda vault. Sentora acts as the strategy designer and risk curator, while Veda provides the vault infrastructure. Sentora then bridges the wrapped xStock to Solana and posts it as collateral in Kamino lending markets, borrowing stablecoins against that collateral and deploying the borrowed funds into selected DeFi strategies. Returns generated by those DeFi deployments are swapped back into the deposited xStock so clients accrue additional tokens rather than receiving cash or stablecoins. Kraken says users do not need an external wallet or seed phrase to participate, though the embedded wallet’s private key can be exported. Withdrawals can be requested at any time; deallocations are processed back to the user’s Kraken balance after a three-day waiting period. Kraken’s documentation warns that the vault strategy uses leverage and lists multiple risks, including smart-contract, liquidity, bad-debt, liquidation, cross-chain execution and downstream-asset risks. If collateral values fall sharply or withdrawal demand spikes, the strategy may close positions quickly and losses would be shared proportionally among vault users. The product is not covered by government or bank protection programs, and xStock holders do not possess voting rights, distribution entitlements or legal claims on the underlying shares. Kraken said the vaults are available in the European Economic Area and other supported markets but are not offered in the U.S., UK, Canada, Australia, UAE or sanctioned countries.