For investors who want to hold Bitcoin (BTC) long-term and also desire passive income, Kraken, a long-established US cryptocurrency exchange, has provided a new solution.
In a press release released Wednesday, Kraken announced the official launch of a new product called "Bitcoin Vault" within its wealth management platform, Kraken Earn. This product allows users to maintain their Bitcoin price exposure while earning BTC-denominated rewards by participating in decentralized finance (DeFi) strategies.
Painless DeFi Participation: Automated Allocation to Top Lending Protocols
For the average user, directly participating in DeFi typically involves a very high learning curve, including managing private keys, bridging assets across chains, and manually transferring funds between different lending or liquidity platforms. Bitcoin Vault was created to significantly simplify these complexities.
According to the announcement, this new service is technically powered by DeFi infrastructure provider Veda and operated by Sentora. Users' assets will be automatically allocated to several mature and well-known on-chain lending and yield protocols, currently including:
- Aave
- Morpho
- Tydro
John Zettler, General Manager of Kraken Payward Services and Head of Earn Products, stated:
"Many Bitcoin holders on Kraken have made it clear that they want a simple, secure way to earn yield on their Bitcoin, which they originally intended to hold for the long term. Bitcoin Vault was built to meet this mindset."
Say goodbye to the shadow of CeFi and embrace transparent on-chain infrastructure.
The launch of this product also reflects a significant strategic shift in cryptocurrency exchange wealth management products. During the market downturn of 2022, centralized crypto lending products (CeFi), which relied heavily on opaque operations, experienced a massive collapse and wave of bankruptcies. Now, in order to regain market trust, exchanges are actively repositioning their wealth management products towards transparent on-chain infrastructure and overcollateralized lending markets.
Kraken points out that Bitcoin Vault has been seamlessly integrated into the Kraken and Krak applications, aiming not only to serve existing users but also to attract external Bitcoin holders who are looking to centralize their assets on major exchanges while also wanting to earn additional returns.
In fact, market demand for this type of hybrid wealth management service is very strong. Kraken revealed that since launching its broader DeFi Earn service in January of this year, its assets under management (AUM) have successfully surpassed $240 million through organic growth without relying on token incentives. Currently, Bitcoin Vault is officially launched and available for use in compliant jurisdictions.
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