- Kraken's xStocks vaults, launched 14 September 2026, show an estimated 2% a year on SPYx and QQQx and 1.8% on NVDAx after a 25% fee, earned by borrowing stablecoins against the deposited shares on Kamino.
- The depositor sits on the borrowing side, so the loan-to-value that sets the yield also sets how far the shares can fall before the loan forces a sale, and any losses are shared across all vault users.
- A tokenized stock in a yield vault is a stock plus a share of a loan, and its risk turns on three numbers the launch material leaves out: the loan-to-value, the price the loan reads when Nasdaq is shut, and how fast the borrowed money can come back.
Kraken's new vault shows a higher yield on an Nvidia share than Nvidia pays. In May the company raised its quarterly dividend twenty-five-fold, from one cent a share to 25 cents. At $211 a share that still comes to under half a percent a year. On 14 September Kraken began showing an estimated 1.8% a year on the same share in tokenized form, NVDAx, and that figure is after its own fee. So can tokenized stocks earn yield? They can, but the extra doesn't come out of Nvidia's profits. The vault posts your shares as collateral, borrows stablecoins against them, and pays you part of what the borrowed money earns.
What you would hold afterwards is a stock with a loan attached.
Lilith walks you through this one. She spent twenty years in cybersecurity, and the habit she kept is following an asset past the screen that shows it, to whoever can move it next. Here that means tracing your shares through the vault one hop at a time. Then it means asking what the loan does when the stock falls.
She starts with your account. Forty NVDAx sit in it, bought over the spring and left alone. Beside them, Kraken now offers to put them to work. "Every xStocks position sitting untouched is capital not working as hard as it should," Darius Tabatabai, head of Kraken Pro, says in the launch release. Lilith reads the line twice. "In my old job, untouched was the goal," she says. "An asset nobody touches is an asset nobody else can reach. So first I want to know what yours pays untouched, and then who gets to touch it," she adds.
Where does yield on a tokenized stock come from?
Lilith begins with the untouched share. A company returns cash to its owners by paying dividends or by buying back its own stock. The buyback never reaches your account. It shrinks the share count, so each remaining share owns a little more of the business. Nvidia does both at scale. In its fiscal first quarter it returned about $20 billion that way, almost all of it through buybacks. Only the dividend ever shows up as a payment, and the new 25 cents a quarter on a $211 share is a small one.
Your NVDAx handles that payment its own way. An xStock gives you the share's price without the vote or a legal claim on the shares, and what an xStock holder actually owns is worth settling before you build on one. When Nvidia pays, the issuer reinvests the dividend after withholding tax by raising a multiplier, and your balance ticks up. Left alone, tokenized stocks yield what the company pays out, minus tax, delivered as a little more of the token.
So Lilith sets the three vault rates beside what their shares pay. The S&P 500 fund behind SPYx yields about 1% a year, the Nasdaq-100 fund behind QQQx about 0.4%, and Nvidia about 0.5%. The vaults show 2%, 2% and 1.8%. A fund paying more than twice as much as another gets the identical vault rate, while a stock paying about what the Nasdaq fund pays gets less.
"When a number stops moving with the thing it's meant to describe, it's describing something else," Lilith says.
Where your shares go after you press deposit
"Start at the button," Lilith says, and turns the vault's diagram toward you. Press deposit and Kraken moves your NVDAx into an embedded wallet on Ink, its own blockchain. There the share is wrapped so the vault can keep count. Then it goes into a vault built on Veda's infrastructure. Sentora, the firm that designed the strategy and manages its risk, carries it across a bridge to Solana. On Kamino, a lending market there, it becomes collateral. The vault borrows stablecoins against it and sends them into what the launch material calls "selected DeFi strategies", without naming them. Whatever they earn is swapped back into NVDAx and added to the pile, after Kraken takes its 25%.
Lilith counts the parties whose terms now touch your share. There's Kraken, the wallet, Veda, Sentora, the bridge and Kamino. There's whoever lends the stablecoins, the strategies nobody named, and Backed, the company that issues the token underneath all of it. That makes nine before she counts the price feed or the swap route home.
The button you press belongs to just the first of them.
The first hop is the one the release leans on. The embedded wallet is self-custodial, its key can be exported, and nobody asks you for a seed phrase. Lilith likes that part, then puts her finger on the next arrow. "The key you can export opens the wallet. Your share left the wallet two steps later," she says. After the deposit, a risk manager's limits and a lending market's code decide when your NVDAx moves. Custody used to mean where an asset sits. In a product like this it means whose rules get to move it.
Then the return comes home, looking like something you already know. The vault turns whatever the stablecoins earned into more NVDAx and adds it to your balance. Nvidia's dividend arrives the same way, through the multiplier, so on the screen the two kinds of growth look identical.
Only one of them is Nvidia's money.
In this vault, your shares are the collateral
So where does the other growth come from? Kraken's release says the vaults "earn yield from onchain lending protocols". Lilith points out that the phrase is accurate about the building and silent about which chair you're sitting in.
You have sat in the other chair before if you've ever parked stablecoins in a yield vault. There you were the lender. Your dollars went out to borrowers, and the yield was what they paid to use them. That's why the lender's seat comes down to trusting whoever took your money. Here your NVDAx goes in as collateral, and the vault borrows against it. You are not the lender this time but the reason a lender on Kamino gets paid.
Being on the paying side changes the arithmetic. Lilith writes the vault's economics as one line on the back of the diagram: what the borrowed stablecoins earn, minus what they cost, times how many there are. Then she runs it backward from the number on the button. A 2% net rate after a 25% fee means the strategy has to clear about 2.67% gross on the whole deposit. Suppose all of that comes from the borrowed dollars, as the product's description suggests. Then how hard they must work depends on how many were borrowed. That ratio is the loan-to-value, and the launch announcement doesn't state it. "The rate is the output. Nobody printed the input," she says.
So she borrows an input from the people who built the product. In a research note in February, seven months before launch, Sentora's chief executive Anthony DeMartino used a "conservative 50% loan-to-value" as his example. At that ratio, $100,000 of tokenized stock supports up to $50,000 in stablecoins. Treat it as an illustration, nothing more. On a $100 deposit, $50 is borrowed. To pay 2.67% on the full $100, those $50 have to earn about 5.3 points a year more than they cost. Borrow $25 and the gap rises to about 10.7 points. Borrow $70 and it falls to about 3.8.
Those three cases describe a single dial. A small loan keeps your shares far from trouble, but the borrowed money then has to find a fat return somewhere. Make the loan bigger and 2% gets easy, while your shares drift closer to the price where the lending market stops being patient.
The yield and the risk are not two settings but one.
Look at NVDAx again with that dial in mind. It shows 1.8% where the two funds show 2%, and the launch material doesn't say why. One reading fits the arithmetic, and it is only a reading. A risk manager facing a single stock that swings harder than an index would borrow less against it, and a smaller loan earns a smaller spread. If that's right, the lower number is the more careful one.
What happens to the loan when Nvidia falls?
You bought NVDAx to hold it, so Lilith asks about the part a holder normally gets to skip. What happens at the bottom of a bad stretch? In your wallet, a falling share is not an emergency but a paper loss with no deadline. Nvidia's price halved over 2022, and a holder who sat still ended the year with as many shares as they started with. A loan against the same shares brings a line. The debt stays fixed in dollars while the collateral shrinks. Once the ratio crosses the lending market's threshold, the collateral gets sold to repay it, even if the position is still worth more than it owes. That last part sounds wrong until you see why a solvent position still gets sold.
Put numbers on it with that illustration. Take a loan at 50% of the collateral's value, in a market that sells at 70%. It trips once the shares have fallen about 29%, because 50 divided by 70 leaves 71% of the starting price. Nvidia has fallen further than that inside a single year. Both ratios are chosen for the example, since the real ones aren't in the launch material. That missing number is the gap Lilith keeps pointing at.
A managed vault isn't meant to sit and wait for the line. Kraken's release describes "exposure limits set in advance and live risk models tracking collateral, liquidity and oracle conditions". A risk manager watching a fall can pull stablecoins back out of the strategies and repay part of the loan before the line arrives. That defense works only if the strategies hand the money back as fast as the stock drops. The product's risk disclosure describes the case where they don't. "If xStock collateral falls significantly or withdrawal demand rises sharply, positions may need to close quickly," it says. Then it names who pays: "resulting losses are shared proportionally among vault users and can reduce the initial deposit".
"So the loan is only as safe as the exit from wherever the borrowed money went, and that's the one hop nobody named," Lilith says.
Read that last sentence of the disclosure again. Losses are shared proportionally. You don't get a loan of your own, with a line sized to how you like to hold Nvidia. You own a slice of one pooled position, run to someone else's limits. Everyone who deposited before you is in it, and so is everyone who rushes for the exit after you. The disclosure lists that rush right beside a falling price as a reason positions may have to close fast.
Lilith puts your forty NVDAx in two places and asks what changes.
| NVDAx in your wallet | NVDAx in the vault | |
|---|---|---|
| What pays you | Nvidia's dividend, folded into more NVDAx | The dividend, plus the vault's estimated 1.8% a year, also paid as NVDAx |
| What you owe | Nothing | A proportional share of a stablecoin loan against the pool |
| A deep fall | A paper loss you can wait out | A paper loss, plus whatever the loan requires at that price |
| Leaving | Whenever you choose | A request, with shares back in three days |
| Who sets the risk | You | The risk manager's limits |
The vault improves one thing, what pays you, and the improvement is capped at the spread. Everything else it touches comes back with a condition attached. The loss from a sale forced at the wrong moment has no cap you can see from the account page.
Holding lets you be wrong slowly, and a loan puts a deadline on it.
Three days to leave a loan that never sleeps
Picture the bad stretch starting on a Thursday. You watch Nvidia slide, decide you want your shares back, and press withdraw. Kraken lets you request a withdrawal at any time and says your xStocks come back in three days. The risk disclosure adds that "periods of high demand or market stress can delay withdrawals when liquidity is not immediately available".
So three days is the calm-weather figure.
On the day the loan tightens, your fastest exit is not a button but a request. The stress that tightens the loan is the same stress that can slow the request down. And your request is still waiting when Nasdaq closes on Friday, which raises a question the launch material leaves open. xStocks can keep trading on-chain through the weekend, and a loan needs a price every minute to know where it stands. So which price does this one read on a Saturday? "A price feed is a key. Whoever holds it decides when your loan crosses the line," Lilith says.
Both possible answers carry risk, and they are different risks. If the feed follows the exchange's sessions, a weekend can't trip the loan. Monday's open can, though, jumping past the line in one print before anyone has a chance to repay. If the feed follows round-the-clock on-chain trading, a thin Saturday market can move the price that matters while the exchange that sets Nvidia's real price is closed. The release's promise of live risk models tells you someone is watching the price feed. It doesn't tell you which one.
Is a 2% yield on tokenized stocks worth the loan?
Back at your account, Lilith turns the rate into dollars. Forty NVDAx at $211 is about $8,440, and 1.8% of that is roughly $150 a year, paid in more NVDAx. Against it sits one event: a fall fast enough, or badly enough timed, that the vault has to sell into it.
The $150 has a ceiling, and the loss in that event doesn't.
Whether that's a fair trade depends on why you own Nvidia. If you trade it actively anyway, a spread for carrying some chance of a forced sale may be reasonable pay. If you bought it to hold through the drawdowns, the vault changes what you own. It hands a risk manager's limits the one decision a long-term holder keeps, which is when to sell.
Before she'd press the button, Lilith wants the loan-to-value and the threshold where the lending market sells. Together they say how far Nvidia can fall before your shares are sold for you. She wants to know which price the loan reads when Nasdaq is closed, because that decides whether a weekend can hurt you or only a Monday morning can. And she wants to know where the borrowed stablecoins sit. The speed at which they come home is the speed at which the vault can defend your shares.
The vault may have good answers, and Sentora has every commercial reason to set careful limits. But this is a share that barely pays, made to pay more by borrowing against it. Once the borrower is a pooled vault, the question worth asking isn't how big the number is. It's whose rules decide when your shares get sold to keep the loan safe.
Pick your line before anyone picks it for you. Tokenized Nvidia trades around the clock in the Kodex simulator on a free $5,000 paper account, so buy some outright and mark the price 29% under your entry: the point where that illustrative 50% loan with a 70% line would start selling. If a month of weekends brings Nvidia anywhere near it, you'll have met the line on a balance that can't cost you anything, long before the question comes attached to shares you own.
