Kraken Unleashes Tokenized Stock Yields with Onchain Vault Launch

Kraken has launched onchain yield vaults for three tokenized stocks, allowing investors to earn up to 2% APY net of fees. The vaults use SPYx, QQQx, and NVDAx as collateral, generating stablecoins that are then deployed into DeFi strategies to produce rewards.

The xStocks serve as collateral for the DeFi strategies, while investors retain exposure to the corresponding stock or ETF. However, this adds a new layer of risk, including protocol and liquidity risks.

Kraken has identified smart-contract, liquidity, bad-debt, and market risks as potential vulnerabilities of the vaults. The deposits are not covered by government or bank protection programs, and Kraken warns that users could lose some or all of their allocation.