Kraken launches noncustodial BTC vault with 2.5% yield

Kraken launched the Kraken Earn BTC Vault on May 28, 2026, offering a 2.5% annual yield. The product attracted about $30 million in Bitcoin deposits from roughly 4,000 unique wallets in the first 10 hours after launch.

Developed with crypto yield infrastructure provider Veda, the vault is noncustodial and designed to let holders earn yield without wrapping coins or moving assets between wallets. Veda described the offering as intended to remove ‘the headaches that come with wrapping Bitcoin, moving assets, or managing a crypto wallet.’

Deposited BTC is swapped for Kraken Wrapped Bitcoin (kBTC), a token that tracks Bitcoin’s price. Crypto platform Sentora then allocates kBTC across lending and liquidity protocols, including Aave, Morpho and Tydro, to generate returns.

Kraken says depositors retain control of their private keys and are the only parties able to withdraw or transfer funds from the vault. The platform estimates withdrawals will take about five days to process.

The service applies a 25% performance fee to rewards. Kraken set the annualized yield at 2.5%, which reflects returns after the fee is applied. Kraken Earn product director John Zettler noted many Bitcoin holders on Kraken want simple ways to earn on Bitcoin they already plan to hold.

Because Bitcoin’s base layer does not include built-in mechanisms for generating yield, services generally rely on wrapped tokens and third-party lending protocols. Kraken’s approach uses kBTC to bridge Bitcoin into those lending markets without requiring individual users to perform wrapping or interact directly with protocols.

Kraken previously launched three stablecoin yield products on Jan. 26 that have attracted about $245 million in customer deposits and generated more than $2.2 million in cumulative yield since launch.

The vault’s conversion to kBTC and allocation by Sentora mean returns depend on the performance of third-party protocols and market conditions. The five-day withdrawal window and the platform’s performance fee are features customers should consider before depositing BTC.