XRP holders can now earn fees from Kraken’s DeFi customers, but there is a catch

A Kraken-distributed USDC vault will direct part of its yield to XRP-linked collateral providers underwriting DeFi losses.On Oct. 15, Firelight announced the addition of Kraken's Protected Strategies USDC vault, extending a coverage protocol launched earlier this month to an investment product available through the exchange's DeFi Earn service. Sentora, the vault's independent curator, arranged the enrollment.The deal creates a potential source of recurring income for holders willing to deploy XRP-linked capital on Flare. Fees from the vault's returns flow to Firelight, where collateral providers share in premiums in exchange for accepting losses from eligible exploits and protocol failures.For Kraken's depositors, the protection comes at the cost of a lower investment yield. Its published annual percentage yield already accounts for coverage fees set by Firelight and Sentora, which can change monthly. Kraken said it receives none of those fees and neither arranges nor guarantees the payouts.The integration gives Firelight access to a new distribution channel as demand for ways to reduce decentralized finance risk becomes a potential business for holders of cryptocurrency capital.K...