Key Notes
- Users can deposit cash or stablecoins into Balanced, High, or Advanced vaults that automatically allocate funds to DeFi lending protocols.
- The platform leverages Privy’s embedded wallet technology and operates on Ink Network, Kraken’s Ethereum Layer 2 blockchain with risk management oversight.
- Kraken charges a 25% performance fee on earnings while rewards stem from actual borrower demand across protocols like Aave, Morpho, and Sky Ecosystem.
Kraken rolled out DeFi Earn on Jan. 26, offering users a straightforward way to access decentralized finance yields directly in the Kraken app.
According to official communication from a thread on X and Kraken’s DeFi Earn landing page, users deposit cash or stablecoins, which convert to USDC if needed, then select one of three vault strategies: Balanced, High, or Advanced, offering up to 8% APY. The system automatically allocates funds to lending protocols and rewards accrue without further input.
We’re making DeFi rewards simple.
Meet DeFi Earn, powered by @Veda_labs, @SentoraHQ and @ChaosLabs.
Earn up to 8% APY on your assets all within the Kraken app experience you already know & trust.
No complicated setup. No technical steps. Just start earning ⤵️… pic.twitter.com/qD9UnwYkus
— Kraken (@krakenfx) January 26, 2026
Notably, the feature relies on embedded wallet infrastructure from Privy, eliminating the need for seed phrases or manual transaction signatures. Vaults are built by Veda Labs on the Ink Network—Kraken’s Ethereum Layer 2 (L2)—with risk oversight from Chaos Labs and Sentora.
Rewards come from actual borrower demand on known DeFi platforms like Aave, Morpho, Tydro, and Sky Ecosystem, a FAQ section in the landing page explains. There are no token subsidies or temporary boosts. Kraken charges a 25% fee on rewards only. Moreover, withdrawals are typically instant, though brief delays can occur if protocol liquidity is low.
DeFi Earn launches in 48 states of the US, Canada, and the European Economic Area, with more regions planned.
Kraken Moves Into DeFi
The product fits into Kraken’s broader push to combine traditional and decentralized finance. In November 2025, the exchange introduced Auto Earn for simple passive yields on crypto holdings with no lock-ups, as covered by Coinspeaker. Earlier moves include commission-free stock and ETF trading in select US states in April 2025 and the Krak Card for unified crypto banking in December.
Kraken also continues development on its own blockchain, Ink, originally announced for expanded DeFi access.
Data from DefiLlama shows the L2 is already ranking 14th by TVL, featuring side by side with leading L1 blockchains like Sui, which ranks 13th. Ink currently goes with $534 million in total value locked and has $595 million in stablecoin market cap, with a 43% dominance by Circle’s USDC.
Ink DeFi data as of January 26, 2026 | Source: DeFiLlama
Overall, the ecosystem went through significant growth in early October last year, backed by Kraken’s user base and market share. This new product could boost this growth even more with easier onboarding and a better user experience.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vini Barbosa has covered the crypto industry professionally since 2020, summing up to over 10,000 hours of research, writing, and editing related content for media outlets and key industry players. Vini is an active commentator and a heavy user of the technology, truly believing in its revolutionary potential. Topics of interest include blockchain, open-source software, decentralized finance, and real-world utility.