The latest product enables users to earn BTC-denominated rewards through DeFi strategies while maintaining their bitcoin exposure.
By Will Canny|Edited by Jamie Crawley May 27, 2026, 12:00 p.m. 2 min readMake preferred on Payward and Kraken co-CEO Arjun Sethi. (CoinDesk)Key Details:
- Kraken has introduced Bitcoin Vault, a new feature under Kraken Earn aimed at long-term bitcoin holders interested in passive income.
- This product operates on technology from Veda and Sentora, utilizing DeFi protocols such as Aave and Morpho for fund allocation.
- Since its inception in January, the broader DeFi Earn initiative has amassed over $240 million in assets.
Kraken is providing a streamlined approach for users to earn yield on their bitcoin BTC$75,685.45 holdings without the need to sell or manage assets within decentralized finance (DeFi) platforms.
The Bitcoin Vault feature, part of Kraken Earn, allows users to earn rewards in bitcoin while still being exposed to BTC's price movements. This product targets long-term holders seeking passive income from assets they intend to retain, according to a press release from Kraken.
The service is facilitated by Veda and managed by Sentora, with customer funds invested in well-known on-chain lending and yield platforms like Aave, Morpho, and Tydro.
“Many bitcoin holders on Kraken have expressed a desire for straightforward and secure methods to earn on the bitcoin they intend to keep,” remarked John Zettler, GM of Payward Services and head of Kraken Earn Products. “Bitcoin Vault caters to that demand,” he added.
The design of Bitcoin Vault aims to simplify the usual complexities associated with DeFi engagement, enabling customers to access yield opportunities seamlessly through their Kraken accounts.
In the crypto space, vaults serve as pooled investment vehicles that automatically allocate users' assets across various DeFi protocols to generate returns. This approach eliminates the need for users to manually shift funds between different platforms for lending, staking, or liquidity, instead consolidating these strategies into one product, often with automated risk management and rebalancing features.
As demand for passive income options related to long-term investments like bitcoin and ether rises, both crypto exchanges and DeFi firms have increasingly launched vault products.
The introduction of Bitcoin Vault represents another advancement in Kraken’s broader strategy to offer on-chain financial products, as exchanges compete to attract users seeking yield-generating options beyond traditional spot trading. Following the collapse of centralized crypto lending products during the 2022 downturn, exchanges and DeFi platforms have been shifting their yield offerings to focus on transparent on-chain infrastructures and overcollateralized lending markets.
Kraken indicated that Bitcoin Vault is targeted not just at current users but also at bitcoin holders outside the platform looking to merge their assets with a major exchange while earning additional yield. The onboarding process for Bitcoin Vault is integrated directly into the Kraken and Krak applications.
Since its launch, the broader DeFi Earn initiative has surpassed $240 million in managed assets, driven by natural customer adoption rather than through token incentives.
Bitcoin Vault is available to users in eligible regions via Kraken Earn.
Read more: Kraken parent Payward's Q1 revenue climbs despite crypto market slump
KrakenBitcoin NewsDeFiExclusiveMore For You
DeFi isn't safe anymore because AI is becoming 'superhuman' at hacking, security chief warns
By Sam Reynolds|Edited by Jamie Crawley3 hours agoAs hacks pile up and DeFi TVL falls fast, one of crypto's top security executives says AI coding agents have made smart contracts fatally vulnerable.
What to know:
- OpenZeppelin CEO Manuel Aráoz warned that he now considers all of DeFi unsafe, arguing that AI coding agents have become “superhuman” at finding vulnerabilities in smart contracts.
- His comments come amid a sharp decline of more than $20 billion in DeFi’s total value locked this year and over $1.1 billion...