Kraken Launches DeFi Earn With Up to 8% APYs as Bitwise Rolls Out Morpho Vault Targeting 6% USDC Yield

Centralized Exchanges and Asset Managers Expand Onchain Yield Access Across Major Markets

TL;DR

• Kraken rolled out DeFi Earn across Canada, the European Economic Area, and most U.S. states, offering onchain APYs of up to 8%.
• Bitwise launched its first onchain vault via Morpho, targeting up to 6% yield on USDC with non-custodial structure.
• Both products emphasize institutional-grade risk management, USDC-denominated vaults, and protocol-level transparency.

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Kraken unveiled its DeFi Earn product on January 26, 2026, expanding access to onchain yield for users in Canada, the European Economic Area, and most U.S. states through its centralized exchange interface. The company said DeFi Earn is designed to offer onchain earning opportunities while maintaining the simplicity and security users expect from a centralized platform, with advertised annual percentage yields of up to 8% depending on market conditions and protocol-level demand, according to an announcement shared exclusively with The Block on that date.

Kraken Director John Zettler described the product’s positioning within the broader financial landscape, saying, “With DeFi Earn, we’re moving decentralized finance from a hobbyist’s pursuit to a mainstream financial utility. It unlocks real-time, transparent rewards in a way that feels natural to anyone. This is the kind of breakthrough that brings decentralized finance to the next billion users.” The company stated that the product is intended to function as a user-friendly bridge between centralized exchange accounts and decentralized lending markets.

DeFi Earn is powered by vault infrastructure provider Veda, with risk management responsibilities assigned to Chaos Labs and Sentora. The first three vaults are denominated in USDC and allocate capital to established onchain protocols including Aave, Morpho, Sky, and Tydro, which Kraken said generate variable returns derived from borrower-paid demand rather than token incentives. Users are shown offered rates, applicable fees, and potential risks prior to depositing, and withdrawals are expected to be typically instant except during periods of constrained liquidity, according to Kraken’s disclosure.

Chaos Labs CEO Omer Goldberg addressed the institutional design of the vaults, stating, “Onchain yield has lacked the infrastructure institutions expect. Launching Chaos Vaults on Kraken changes that, bringing AI-powered risk intelligence to millions of users and laying the foundation for how institutional-grade yield operates at scale.” Kraken placed the rollout alongside similar moves by other centralized platforms integrating decentralized finance features directly into their core products.

Bitwise Asset Management also disclosed a new onchain yield initiative on January 26, 2026, launching its first onchain vault strategy by joining the decentralized lending protocol Morpho as a vault curator. The initial vault targets up to 6% yield on the USDC stablecoin by deploying capital into over-collateralized lending markets on Morpho, with Bitwise overseeing strategy design and real-time risk management while user funds remain non-custodial and held onchain, according to details provided to The Block.

Jonathan Man, Bitwise’s head of multi-strategy solutions and portfolio manager, said the firm views the vault as an entry point into broader onchain strategies. “Decentralized finance, or DeFi, offers compelling yield opportunities, but the complexity of managing onchain risk has kept many investors on the sidelines,” Man said. “That’s why we’re so excited for Bitwise to enter vault curation. Bitwise provides a critical value-add by layering institutional-grade risk management and regulated oversight onto these non-custodial tools.” He added that additional stablecoins, crypto assets, and strategies could be supported in the future.

Bitwise has previously described onchain vaults as “ETFs 2.0” and reported that assets in such vaults grew from less than $100 million during 2024 to $2.3 billion before accelerating in 2025 and peaking at $8.8 billion ahead of a volatility-driven pullback later that year. The firm said that episode exposed weak risk management across some strategies, while maintaining that higher-quality vault curators are positioned to attract capital as the sector matures.

This article has been refined and enhanced by ChatGPT.