Crypto exchange Kraken launched a non-custodial Bitcoin product offering a 2.5% yearly yield, adding to the company’s yield product offerings amid increasing investor demand for crypto rewards.
Kraken unveiled the product on Wednesday with the support of crypto yield infrastructure provider Veda, which said the offering seeks to remove “the headaches that come with wrapping Bitcoin, moving assets, or managing a crypto wallet.”
Kraken’s offering comes as Bitcoin (BTC) holders’ demand for yield products has risen, but have seen limited development as the Bitcoin blockchain does not have mechanisms for users to generate yield compared to blockchains such as Ethereum and Solana.
“Many Bitcoin holders on Kraken have made it clear they want simple ways to earn on the Bitcoin they already plan to hold,” Kraken Earn product director John Zettler said in a statement.
Source: Kraken
About 10 hours after the launch, Veda said the Bitcoin yield product had passed $30 million worth of Bitcoin deposits from 4,000 unique wallets.
Kraken’s three stablecoin yield products that it launched in January have exceeded around $245 million in customer deposits and generated over $2.2 million in yield since launching on Jan. 26.
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Kraken’s product generates yield from Bitcoin by swapping it to Kraken Wrapped Bitcoin (kBTC), a token replicating Bitcoin’s price, which crypto platform Sentora then allocates across crypto lending platforms such as Aave, Morpho and Tydro.
The product is non-custodial, meaning only depositors can withdraw or transfer their funds. Withdrawals are estimated to take five days to process, and the service providers take a 25% performance fee on rewards.
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