Rewards in DeFi Earn are: Variable : Based on market demand and supply in the lending protocols. Continuous : Balances grow in real time, rather than weekly or monthly payouts. Compounded : Your earnings automatically increase your vault balance. On Kraken, you can track lifetime rewards, recent performance, and average APY in the Earn tab.

Most DeFi Vaults allow instant withdrawals , subject to available liquidity in the vault. If many users withdraw at once and liquidity is low, you may need to wait until the vault is rebalanced by the automated protocol. Withdrawals are always returned as USDC.

DeFi Earn is being rolled out across Kraken (web and app), Kraken Pro (web and app) and Krak (mobile-only). Defi Earn is available where Kraken serves clients in the US, EEA and Canada. If you don’t see DeFi Earn in your account, it may not be available in your jurisdiction yet.

What is DeFi Earn on Kraken?

Q: What is an Embedded Wallet?

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. Your assets move onchain into smart contract vaults through this wallet. You retain control over deposits and withdrawals, and Kraken does not control the wallet or the underlying protocols. What does “non-custodial” mean? Only you can initiate transfers into or out of DeFi Earn. Kraken, including Kraken Support, cannot move assets on your behalf, nor can Kraken reverse transactions.

Last updated: January 22, 2026

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
Choose an asset you want to earn yield on.
2
Assets are converted to USD Coin (USDC), a widely used stablecoin in DeFi.
3
Your USDC is moved to your embedded wallet and allocated to an onchain DeFi Vault.
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.

What is an Embedded Wallet?

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.
•
Your assets move onchain into smart contract vaults through this wallet.
•
You retain control over deposits and withdrawals, and Kraken does not control the wallet or the underlying protocols.

What does “non-custodial” mean?

•
Only you can initiate transfers into or out of DeFi Earn.
•
Kraken, including Kraken Support, cannot move assets on your behalf, nor can Kraken reverse transactions.

Vault strategies

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

Rewards in DeFi Earn are:

•
Variable: Based on market demand and supply in the lending protocols.
•
Continuous: Balances grow in real time, rather than weekly or monthly payouts.
•
Compounded: Your earnings automatically increase your vault balance.

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

Withdrawals

•
Most DeFi Vaults allow instant withdrawals, subject to available liquidity in the vault.
•
If many users withdraw at once and liquidity is low, you may need to wait until the vault is rebalanced by the automated protocol.
•
Withdrawals are always returned as USDC.

Availability

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

•
Defi Earn is available where Kraken serves clients in the US, EEA and Canada.

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

Risks

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?

The rewards you earn can change over time, and there’s a chance 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.

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.