Kraken Institutional Taps Upshift for Bespoke DeFi Yield Vaults

Kraken Institutional, a division of the cryptocurrency exchange Kraken, has partnered with Upshift, a multi-chain vault infrastructure provider. This collaboration aims to introduce custom, permissioned DeFi yield vaults directly into Kraken Institutional's qualified custody offering. The integration is designed to simplify the process for institutional clients seeking to generate yield from their digital assets held with Kraken, by eliminating the need for separate wallets or complex infrastructure management.

The new offering allows Kraken Institutional clients to access DeFi yield directly from Kraken's secure custody solution. Clients can tap into bespoke and curated strategies managed through their existing Kraken relationship, without the operational burden of managing multiple wallets, onboarding numerous providers, or building internal infrastructure to coordinate on-chain and centralized activities.

Upshift, which raised $10 million in a Series A round led by Dragonfly in March 2025, specializes in providing institutional-grade vault infrastructure across various blockchain protocols. By integrating Upshift's technology, Kraken Institutional aims to combine its existing suite of services, including qualified custody, deep exchange liquidity, prime execution, OTC services, staking, and margin financing, with Upshift's institutional vault capabilities. This synergy is intended to offer a more capital-efficient pathway for institutions to generate yield and engage with cross-market opportunities through a single institutional relationship.

Through the integration, institutions will be able to deploy assets into permissioned vaults directly from their existing Kraken Institutional custody accounts. When assets are allocated on-chain, a receipt token representing the client's position is returned to their segregated Kraken qualified custody solution. This receipt token is not pooled or rehypothecated and is reflected on the custody statement at its redeemable underlying value, providing clients with clear visibility into their withdrawable assets. The architecture maintains institutional controls and accounting at the vault, protocol, chain, and token levels.

Unlike generic shared pools, Upshift focuses on building custom, dedicated vaults tailored to a specific client's strategy, asset mix, liquidity requirements, and risk parameters. Kraken plans to collaborate with Upshift and a select group of professional vault curators to support a range of strategies across DeFi, CeFi, PayFi, and real-world assets, spanning over 30 different blockchains. This allows institutions to leverage idle assets, such as stablecoins, ETH, or BTC held within Kraken Institutional, as a starting point for broader capital deployment strategies.

The partnership is positioned to enhance capital efficiency by consolidating yield generation and market access within a single platform. Clients can access yield opportunities without the need to independently manage diverse wallets, chains, venues, counterparties, or protocols, thereby mitigating the operational complexities that have historically made many yield strategies impractical for institutions.

Aya Kantorovich, CEO and Co-Founder of Upshift, commented on the challenges institutions face: "Institutions have long faced a trade-off between secure custody and putting funds to work. Kraken and Upshift remove the operational overhead of sourcing yield efficiently across exchange, OTC and onchain markets that have kept capital idle." She further elaborated that Kraken's prime services combined with Upshift's vault infrastructure enable clients to generate yield without the burden of establishing new wallets, counterparties, or protocols, all while maintaining rigorous risk management.

Gregory Barasia, Head of Asset Management at Kraken Institutional, highlighted the strategic importance of this development: "Custody should be the starting point for what institutions can do with their assets, not the ending point. Vaults are the next step in making Kraken Custody the most productive place for institutional capital to sit." He emphasized that this integration removes the long-standing dilemma for institutional clients, allowing them to secure their assets while actively deploying them for yield. The architecture is designed to activate assets already held through Kraken Institutional, preserving institution-specific risk parameters, permissions, approvals, and reporting.

The Kraken Institutional × Upshift integration offers eligible clients a unified access point for a comprehensive suite of services. This includes curated on-chain yield, centralized market strategies, exchange liquidity, credit facilities, derivatives, and bespoke over-the-counter (OTC) opportunities, all without requiring a separate operational stack.

Institutional Vaults are gradually being rolled out to eligible Kraken Institutional and Kraken Custody clients in supported jurisdictions. Access is subject to onboarding processes, product eligibility, and strategy-specific terms. To inquire about access or learn more, clients are directed to contact their Kraken Institutional representative or visit the Kraken institutions page on their website.

It is crucial for prospective users to understand the risks associated with these services. Custody services are provided by Payward Financial, Inc. or Payward Europe Solutions, Ltd., as applicable. Notably, Payward Financial, Inc. d/b/a Kraken Financial is not an FDIC-insured bank, and deposits are neither insured by nor subject to FDIC protections. Payward Europe Solutions Limited, trading as Kraken, is regulated by the Central Bank of Ireland.

The rewards generated from DeFi strategies are variable and not guaranteed; there is a risk of losing some or all of the invested assets. Interacting with on-chain smart contracts carries inherent risks, including technological vulnerabilities (bugs, exploits, oracle/MEV/bridge failures), market risks (price volatility, de-pegs, liquidations), and operational risks (irreversible transactions, gas fees, network congestion). Kraken does not control third-party protocols.

The offered services are provided by Payward Wallet, LLC., and fees may apply. Availability of these products and services varies by jurisdiction and is subject to applicable laws and regulatory requirements. OTC services, including spot trading, derivatives, and lending, are offered by Payward Oceanic Ltd., a member of the Kraken Group, and are available only to eligible clients, potentially not in all jurisdictions. OTC transactions involve risk and can result in capital loss.

This communication is intended for informational purposes only and does not constitute investment, legal, or tax advice. The materials are for general information purposes only and do not represent an investment recommendation or solicitation to buy, sell, stake, or hold any cryptoasset, or to engage in any specific trading strategy. Kraken does not guarantee or undertake efforts to increase the value of any cryptoasset purchased by a client. Some crypto products and markets are unregulated, and users may not be protected by government compensation and/or regulatory protection schemes due to this lack of regulation. The unpredictable nature of the digital asset market means that investors may not be protected.

While the partnership focuses on providing custom vaults and enhanced capital efficiency, the specific DeFi protocols and strategies that Kraken and Upshift will support through vetted curators remain largely undisclosed. The exact number of chains beyond the initial 30+ mentioned, and the specific criteria for "eligible clients" and "supported jurisdictions," are also not detailed. Further clarity on the fee structures associated with these custom vaults and the precise risk management frameworks applied by the professional curators would be beneficial for institutions considering this offering.

Source-tracked CryptoRescue article.