Kraken launches Bitcoin Vault with ~2% BTC yield

Kraken has launched a new product called Bitcoin Vault, allowing users to earn yield on their bitcoin holdings directly through the exchange’s platform. The product, now live within the existing Kraken Earn section, is designed for long-term holders seeking passive income while maintaining direct exposure to bitcoin’s price.

The Bitcoin Vault works by automatically deploying user-deposited bitcoin into curated decentralized finance (DeFi) strategies. Upon deposit, bitcoin is converted into a wrapped token called kBTC on Kraken’s Ink network. These funds are then supplied as collateral to established DeFi lending protocols, including Aave and Morpho, to generate yield. The returns, denominated and paid in bitcoin, are automatically compounded back into a user’s balance. The platform quotes an estimated annual percentage yield of approximately 2.0%, net of fees, though rates are variable and not guaranteed.

A key feature is its integrated design, which abstracts the underlying complexity. Users do not need to manage external wallets, seed phrases, or interact directly with DeFi protocols. The minimum deposit is 0.00006 BTC, and withdrawals are subject to a five-day deallocation...