Kraken Launches xStocks Vaults That Borrow Against Tokenized Equities

Kraken has launched three vaults that let eligible clients earn variable yield on SPYx, QQQx and NVDAx while retaining exposure to the tokenized equity or exchange-traded fund they deposited.

The xStocks vaults initially display an estimated net APY of 2% for SPYx and QQQx and 1.8% for NVDAx. Kraken charges a 25% performance fee on vault earnings, with the displayed rate already net of that fee. Rewards are converted into the same xStock and automatically compounded into the depositor’s balance.

Sentora announced that it designed the strategy and curates its risks. Veda supplies the vault infrastructure.

Yield Via Kamino Lending Markets

When a client allocates an eligible xStock, Kraken sends it to an embedded self-custodial wallet on Ink, wraps it for vault accounting and deposits it into a Veda vault. Sentora is the vault’s risk manager, Veda is its administrator, and Kraken provides access without controlling the underlying strategy or protocols.

Sentora then bridges the wrapped xStock to Solana and posts it as collateral in Kamino lending markets. The strategy borrows stablecoins against the collateral and deploys them into selected DeFi strategies. Returns are swapped back into the deposited xStock, so a SPYx depositor accrues more SPYx rather than receiving cash or stablecoins.

The product packages an onchain credit strategy inside Kraken’s interface. Clients do not need an external wallet or seed phrase, although Kraken says the embedded wallet’s private key can be exported. Deallocation can be requested at any time, but the xStocks are returned to the client’s Kraken balance after a three-day waiting period.

The launch pushes xStocks beyond trading. In March, The Defiant reported that xChange enabled cross-chain trading for more than 70 tokenized stocks across Ethereum and Solana. The new vaults initially support only SPYx, QQQx and NVDAx and use Ink and Solana for execution.

The Yield Engine Uses Leverage

Kraken’s support documentation says the vault strategy uses leverage by borrowing stablecoins against xStock collateral. The client keeps an xStock-denominated position rather than multiplying the directional equity exposure, while the machinery underneath that position takes on debt to generate yield.

That structure adds risks beyond simply holding an xStock. Kraken lists smart contract, liquidity, bad-debt, liquidation, cross-chain execution and downstream-asset risks. If xStock collateral falls significantly or withdrawal demand rises sharply, positions may need to close quickly; resulting losses are shared proportionally among vault users and can reduce the initial deposit.

Separately, periods of high demand or market stress can delay withdrawals when liquidity is not immediately available. Rewards are not guaranteed, and the product is not covered by a government or bank protection program.

“Full equity exposure” also refers to economic exposure through the token, not ownership of the underlying shares. Kraken’s risk disclosure says xStock holders have no voting rights, distribution entitlements or legal claim to the underlying stock. They also face operational and credit risks tied to Kraken, issuer Backed and the institutions holding the backing assets.

At launch, Kraken says the vaults are available in the European Economic Area and other supported markets, but not in the U.S., UK, Canada, Australia, UAE or sanctioned countries.