Kraken Attracts $200 Million in Deposits for App-Based DeFi Yield Product

Kraken's DeFi Earn product has surpassed $200 million in deposits, meeting increased demand for on-chain yield accessible from a standard exchange app. The program allows customers to earn dollar-denominated returns on their balances without transferring funds to external wallets or directly interacting with DeFi protocols.

According to infrastructure provider Veda, Kraken DeFi Earn operates on three vaults supplied by Veda. Over 40,000 users now utilize these vaults via the Kraken app to generate yield on cash and stablecoins. The product converts deposits into USDC and allocates them into on-chain strategies, while users see only a simplified earn interface within Kraken.

Veda's technology enables the vaults to connect to multiple DeFi protocols and blockchains. This structure aims to achieve higher yields than a single protocol can provide. It also allows Kraken to adjust strategies over time without altering the product's user experience.

Unlike earlier DeFi cycles where many products relied on rewards or airdrops to attract deposits, Kraken leverages its existing user base and an integrated experience. Users can access on-chain yield from the same app they use for trading and custody.

Veda provides the multichain, multiprotocol vault infrastructure that powers Kraken's DeFi Earn product. It manages deposits, strategy execution, and cross-chain operations for all three vaults, enabling Kraken to offer DeFi yields without requiring users to handle blockchain wallets or complex protocols directly.

Kraken has been deploying and refining DeFi Earn in the US, Canada, and Europe, offering on-chain yields through integrated vaults while maintaining the user experience within its familiar app and supplementing it with new security education.

The technology allows Kraken's vaults to operate on the Ink blockchain (Kraken's Ethereum L2) while simultaneously sourcing yield from protocols on both Ink and Ethereum. Veda's programmable and flexible vaults can support any blockchain, deposit asset, or DeFi protocol.

This enables vault curators Chaos Labs and Sentora to allocate deposits across multiple trusted protocols precisely to generate passive income for Kraken users. According to Sun Raghupathi, Veda Co-Founder, the partnership allows Kraken to deliver "a seamless experience" while accessing on-chain markets that offer higher variable APYs compared to traditional earning options.

Recently, Kraken has garnered attention for its IPO push, securing direct Federal Reserve payments access as a crypto bank, and continuing to market and expand its DeFi Earn product. The IPO filing and Fed master account have prompted new scrutiny over how deeply a crypto-native institution should integrate into core US financial systems, but they also bolster Kraken's positioning as a regulated, bank-like platform rather than a pure-play exchange.