Kraken's xStocks Vaults Service Offers Up to 2% APY for Tokenized Stocks and ETFs
Kraken has launched its xStocks Vaults service, which allows users to earn rewards on their tokenized stocks and ETFs. The xStocks Vaults are designed for S&P 500-linked ETF SPYx, Nasdaq-100 linked ETF QQQx, and NVIDIA stock linked NVDAx.
The estimated annual percentage yield (APY) at launch is 2% for SPYx and QQQx, and 1.8% for NVDAx, after deducting fees. However, the interest rate may fluctuate and is not guaranteed.
The xStocks Vaults service is managed by Sentra, a company specializing in DeFi risk management. The deposited xStocks are transferred to Veda's wallet, which provides DeFi infrastructure. Sentra then bridges the xStocks to Solana (L1) blockchain and uses Kamino lending protocol as collateral.
The borrowed stablecoins can be used for DeFi strategies that generate interest. Additionally, the rewards earned from the vault are automatically reinvested in the same asset's xStocks, creating a compounding effect.