Kraken customers eligible for xStocks vaults can now allocate SPYx, QQQx and NVDAx to strategies that borrow against tokenized equities. Veda described the product in its 10 September announcement, with a separate vault for each asset and Sentora managing the strategies.
The mechanics span two blockchains. Deposits enter a Veda vault on Ink through an embedded self-custodial wallet. Sentora then moves the xStocks to Solana, places them as collateral in Kamino lending markets and borrows stablecoins. Those stablecoins fund additional DeFi strategies. Ink handles the vault entry and accounting; Solana hosts the described collateral and borrowing activity.
Where the rewards come from
The additional return depends on borrowing and DeFi strategies, rather than simply collecting a stock dividend. According to Kraken's product documentation, rewards are converted into the same xStock that the customer deposited and automatically reinvested. A SPYx allocation therefore earns additional SPYx, while retaining exposure to changes in the underlying asset's price. A larger token balance does not guarantee a higher dollar value.
Kraken applies a 25% performance fee to vault earnings. Returns vary and are not guaranteed; the initial rates described in its documentation are estimates.
Borrowing changes the withdrawal decision
Kraken lists a three-day wait when a customer requests deallocation. Its risk disclosures also say that insufficient liquidity during market stress can delay withdrawals further.
Borrowing against xStocks introduces liquidation and leverage risk alongside smart-contract and cross-chain execution risks. A fall in collateral value can force positions to close, with losses shared across vault users. This makes the withdrawal terms and borrowing structure material parts of the product, even when access is packaged inside an exchange account.