xStocks not available in the UK. Geo restrictions apply. See kraken.com/legal/xstocks to learn more.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more.

What are xStocks Vaults (SPYx, QQQx, NVDAx) on Kraken

Kraken’s xStocks Vaults let you earn rewards on tokenized equities and ETFs you hold, directly from your Kraken account. Your SPYx, QQQx, or NVDAx is allocated to onchain lending markets through a non-custodial embedded wallet, and rewards accrue automatically over time. You can withdraw at any time with a 3-day wait time.

Like other vaults, your assets are held in a self-custodial embedded wallet and allocated to decentralized protocols. The key difference is that xStocks Vaults are purpose-built for tokenized equities, so your rewards are paid in the same xStock you allocated, and you stay fully exposed to the price of the underlying index.

How xStocks Vaults work

When you allocate SPYx, QQQx, or NVDAx to a vault, it’s sent to your embedded wallet on the Ink network, wrapped to each xStocks wrapped version for vault accounting purposes, and deposited into a Veda vault managed by the vault’s risk manager, Sentora.

Next, your xStocks are supplied as collateral to a lending protocol, and stablecoins are borrowed against them. These stablecoins are deployed into reward-generating DeFi strategies. Rewards are converted back into your xStock and re-deployed so they auto-compound.

When you deallocate, your xStock is unwrapped and returned to your Kraken balance.

All of this happens behind the scenes, so you don’t need to worry about onchain complexity. In the Kraken interface, you simply see your balance grow.

Additional Information

Rewards accrue continuously and are auto-compounded into your vault balance. You don’t need to claim them manually. Rewards are paid in the same xStock you allocated. Vault rewards are not guaranteed and can change until you deallocate.

You can track your lifetime earnings in the “Lifetime Earnings” section of the Earn page.

Earning rates are variable and depend on borrowing demand in the underlying lending markets. The APY displayed is the trailing 7-day average and may change over time.

Note: During the initial launch period of the xStock vaults, the displayed APY is a fixed estimate of 2.0% net of fees for SPYx and QQQx, and 1.8% for NVDAx.

There is a 25% performance fee on vault earnings, applied at the protocol level. There are no fees to allocate or deallocate, and no gas fees for deposits or withdrawals on the Ink network. The APY you see is net of fees.

The xStocks Vaults use well-established protocols and infrastructure that have been widely tested in the market. However, as with any onchain strategy, there are important risks to be aware of.

  • Smart contract risk: The vault relies on audited and widely used smart contracts. As with any onchain system, there is a possibility of bugs or exploits that could impact funds.

  • Liquidity risk: In periods of high demand or market stress, withdrawals may be delayed if liquidity is not immediately available. Funds generally remain in the vault and continue earning until liquidity returns.

  • Bad debt and market risk: The strategies rely on overcollateralized lending. In extreme market conditions, rapid price movements can lead to losses that may reduce your vault balance, including your initial deposit. Any resulting losses are shared proportionally across vault users.

  • Liquidation risk: The xStocks Vaults rely on borrowing stablecoins against xStocks collateral. If the value of the respective xStocks collateral declines significantly or withdrawal demand increases sharply, positions may need to be closed quickly. Any resulting losses are shared proportionally across vault users.

  • Cross-chain execution risk: The vault moves assets across blockchains. Delays or issues with these transfers can slow withdrawals or position adjustments, which may increase exposure to changing market conditions.

  • Leverage risk: The vault uses leverage by borrowing against xStocks collateral to increase exposure. While this can enhance returns, it also increases sensitivity to market movements, meaning losses can be amplified during periods of volatility.

  • Downstream asset exposure: The vault’s strategy may involve assets beyond what you deposit, including wrapped or synthetic tokens and stablecoins. These carry their own risks, such as loss of peg or custodian failure.

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 xStocks Vaults, you’re taking on market and protocol risk, meaning the value of assets or the systems involved could change or fail.

Frequently asked questions

Holding xStocks tracks the index with no yield. Allocating to a vault keeps that same exposure while your balance also earns rewards.

No. Kraken automatically creates a non-custodial embedded wallet for you when you make your first DeFi Earn allocation. You don’t need to manage seed phrases or use any external tools.

Yes. All rewards are paid in the same xStock you allocated and auto-compounded into your vault balance.

You use the same embedded wallet for all vault allocations. Each position is tracked separately and can be managed independently.

The vault is managed by Sentora as the risk manager and administered by Veda. Kraken provides access to the vault but doesn’t control the strategy or the underlying protocols.

Yes. You can export your embedded wallet’s private key at any time through Earn Settings. This is permanent and irreversible.

No. These are two different types of holdings, including for tax purposes.

At launch, xStocks Vaults are available in the EEA and rest of world, excluding the UAE. They’re not available in the UK, US, Canada, or Australia, or in sanctioned countries.

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