On Monday, Kraken rolled out its DeFi Earn product for users in most US states, the European Union, and Canada, marking a major expansion of its decentralized finance offerings.
The new feature allows users to earn up to 8% annualized yield directly within the Kraken app, without managing private keys, seed phrases, or on-chain transactions.
The product utilizes Veda’s vault system to provide DeFi services for users of centralized exchanges. At the time of its launch, Kraken began USDC vaults that invested funds into popular lending platforms such as Aave, Morpho, Sky, and Tydro. The rewards are earned from actual lending activities on these platforms, not from any reward or token program.
According to Kraken, users can choose between Balanced, High, and Advanced vaults depending on the level of risk they are willing to take, and rewards are automatically earned after a deposit. The on-chain activities are handled by the wallet technology of Privy, such that the process is similar to that of traditional exchanges.
Risk Management and Liquidity Structure
The risk management of DeFi Earn is managed by Chaos Labs and Sentora. They track the DeFi protocol risk and the on-chain risk conditions. The money is diversified across many protocols to prevent concentration risk, as is the case with institutional DeFi products.
Withdrawals are typically instant, although the company explains that there may be some delay if the liquidity in the vault is low. In such cases, users may not be able to withdraw their funds until the liquidity increases. The company further explains that the returns will adjust depending on the market demand and usage of the protocol, which is in line with the DeFi lending market.
Industry experts believe that this product is a part of a larger trend, where the centralized exchanges are working towards making DeFi more accessible while providing risk management solutions. Industry research on DeFi adoption indicates that there is a growing requirement for more accessible yield products in uncertain market conditions.
DeFi Earn Aligns With Kraken’s Ecosystem Expansion
Kraken’s DeFi Earn is a strategy by the company to combine centralized solutions with decentralized technology. In November 2025, the company introduced Auto Earn, which allows customers to earn passive income on their crypto without locking it away.
In the early part of 2025, the exchange introduced commission-free stock and ETF trading in certain US states and introduced the Krak Card, which assists with crypto spending.
Kraken is also developing its own Layer 2 blockchain network called Ink to simplify DeFi. Ink, according to DefiLlama, is the 14th largest DeFi chain in terms of total value locked, with a value of approximately $534 million. The stablecoin supply in the blockchain is approximately $595 million, with Circle’s USDC accounting for 43%.
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