What is DeFi Earn on Kraken?

Last updated: October 15, 2026
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Introducing DeFi Earn, a way to put your idle assets to work on Kraken and Krak. By depositing eligible assets into DeFi Earn Vaults, you can earn rewards directly from decentralized finance (DeFi) lending markets.

DeFi Earn uses embedded wallet technology. This style of embedded wallet gives you access to onchain yield opportunities while keeping the experience simple, no seed phrases or private keys to manage.

How DeFi Earn works

  1. 1

    Choose the vault you want to earn yield on. (ex. the USDC Vault or the BTC Vault)

  2. 2

    If the asset you're depositing isn't the vault's base asset, it's automatically converted, for example, deposits into the USDC Vault are converted to USD Coin (USDC), and deposits into the BTC Vault are converted to Bitcoin (BTC).

  3. 3

    Your USDC or BTC is moved to your embedded wallet and allocated to an onchain Vault.

  4. 4

    These vaults supply funds into borrow/lend protocols (such as Aave etc). Borrowers pay interest into the protocol, and the protocol pays you rewards for supplying it with capital."

You remain in control of your embedded wallet, and you can pull your funds back to Kraken at any time.

Kraken’s Embedded Wallet is a non-custodial wallet that’s created in the background for you when you use DeFi Earn. It allows you to interact directly with onchain protocols inside the Kraken app. There is no need to manage private keys or review blockchain transactions. 

Similar to self-custodial wallets, like Metamask or Phantom, the Kraken Embedded Wallet holds assets that only you control. Kraken cannot move these assets without your participation.

How the Embedded Wallet works

When you allocate assets on DeFi Earn:

  • •

    A non-custodial wallet is created and linked to your Kraken account.

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    Your assets move onchain into smart contract vaults through this wallet.

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    You retain control over deposits and withdrawals, and Kraken does not control the wallet or the underlying protocols.

What does “non-custodial” mean?

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    Only you can initiate transfers into or out of DeFi Earn.

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    Kraken, including Kraken Support, cannot move assets on your behalf, nor can Kraken reverse transactions.

When allocating, you’ll see different vault options, each with its own risk and return profile.

Each vault displays its current Annual Percentage Yield (APY), total value locked (TVL), instantly-available liquidity, and the current allocations of the vault.

Risk manager

Each vault is an automated smart contract which determines how deposited assets are distributed across strategies to help maintain a balance between yield and risk. Kraken does not manage or control these vaults.

Rewards in DeFi Earn are:

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    Variable: Based on market demand and supply in the lending protocols.

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    Continuous: Balances grow in real time, rather than weekly or monthly payouts.

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    Compounded: Your earnings automatically increase your vault balance.

On Kraken, you can track lifetime rewards, recent performance, and average APY in the Earn tab.

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    Most DeFi Vaults allow instant withdrawals, subject to available liquidity in the vault.

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    If many users withdraw at once and liquidity is low, you may need to wait until the vault is rebalanced by the automated protocol.

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    Withdrawals are always returned as the vault’s base asset.

DeFi Earn is being rolled out across Kraken (web and app), Kraken Pro (web and app) and Krak (mobile-only).

  • •

    DeFi Earn is available to eligible Kraken clients across most regions we serve, including the US, EEA, and Canada. It is not currently available in certain jurisdictions, such as the UK, Australia and UAE.

If you don’t see DeFi Earn in your account, it may not be available in your jurisdiction yet.

Defi Earn is built on blockchain technology, which means everything is visible and recorded on chain and reviewed by independent auditors. However, like all decentralized finance (DeFi) products, there are some risks to be aware of:

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    A coding mistake could cause problems in how the system works.

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    If a borrower or partner system fails, it could affect your funds.

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    During busy times or market stress, it might take a little longer to take money out.

Before you deposit, each Vault clearly lists its specific risks and shows how much liquidity (available assets) it currently has, so you can always make an informed decision about what you’re getting into.

Is my deposit insured or guaranteed? 

No. Your deposit is not insured. Rewards can change over time, and you could lose some or all of your deposit. Vaults aren’t part of any government or bank protection program, so they don’t come with the same safety nets as traditional savings accounts.

Sentora, the independent curator of the Protected Strategies USDC vault, has enrolled the vault in an onchain coverage program provided by Firelight, a third party. Under Firelight’s terms, it may cover specific technical and economic failure events up to a capped amount. It does not protect against market losses and it does not guarantee your deposit or your rewards. Learn what Firelight coverage includes.

When you use DeFi Earn, you’re taking on market and protocol risk, meaning the value of assets or the systems involved could change or fail.

Rewards are variable and not guaranteed; you can lose some or all of your assets. Interacting with on-chain smart contracts involves risks which are further detailed in the terms of service, including technological risk (bugs, exploits, and oracle/MEV/bridge failures), market risk (price volatility, de-pegs, and liquidation where relevant), and operational risk (irreversible transactions, gas fees, network congestion). Kraken does not control third-party protocols. Offered by Payward Wallet, LLC. Fees apply. Availability varies by jurisdiction.