Onchain yield platform Upshift has partnered with Kraken Institutional to let eligible institutional clients earn yield on their idle bitcoin, ETH, stablecoins and other crypto assets directly inside Kraken's qualified custody, according to an announcement shared with The Block.
As part of the partnership, Upshift will build dedicated vaults tailored to each client’s specific investment strategy, risk parameters, liquidity needs, and asset mix. The firms are working with a "vetted," though unnamed, "group of professional vault curators across a range of asset types and risk profiles," according to the announcement.
Assets allocated to these non-custodial vaults will then be deployed into selected onchain contracts, with a receipt token returned to the client's segregated Kraken custody account. "Institutional controls and accounting are enforced at the vault, protocol, chain and token levels," the announcement reads.
The move is part of a wave of innovation in so-called crypto vaults, or programmatic smart contracts that automatically deploy funds across DeFi protocols to generate yield following curated strategies.
It also comes as crypto exchanges like Kraken and Coinbase continue to compete over their prime offerings, with the ability to earn yield on idle funds a core selling point. Custodians like BitGo and Anchorage are also beginning to experiment with onchain deployments using offchain, secured funds.
