Kraken, one of the oldest and largest cryptocurrency exchanges in operation, now offers its users access to DeFi yields through a new product called DeFi Earn. The product is powered by Aave, the largest and most-trusted decentralized lending protocol in the market.
Why Aave
Aave holds more than $50 billion in net deposits, making it the dominant lending protocol in DeFi. It accounts for roughly 82% of all outstanding debt on Ethereum and commands about 60% of the broader DeFi lending market. This scale translates to deep liquidity, which means deposits can be allocated and withdrawn efficiently without issues.
Aave also maintains a strong security track record. The protocol has a Safety Module called Umbrella, which is a reserve pool of staked assets that can cover shortfalls in the event of a deficit. This makes Aave a go-to choice for any centralized exchange looking to offer DeFi yields to its customers.
How It Works
DeFi Earn is available across Kraken's Consumer, Pro, mobile interfaces, and Krak wallet. Users deposit cash or stablecoins. Funds are converted to USDC if needed and deposited into a vault on the Ink network. The vault then supplies liquidity to lending protocols like Aave. Borrowers pay rewards, increasing the vault's share value and growing your rewards automatically.
Embedded DeFi
By integrating Aave, Kraken gives its users a way to earn DeFi yields without leaving the exchange. You can view your balance, track rewards, and withdraw when liquidity is available, all without managing seed phrases or signing transactions manually.
This product combines a trusted centralized exchange providing access to the largest and most liquid decentralized lending protocol. Users get the convenience of a familiar interface and the yield potential of DeFi.