Why vault yields may emerge as the next mainstream crypto primitive

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The demand for vaults is growing at a rapid pace. How can one tell? All you need to do is see how quickly major exchanges like Kraken or Coinbase and asset management firms like Bitwise are jumping in to provide users more control over their assets. 

But how are vaults different? According to Veda CEO Sun Raghupathi, when an asset is onchain and put into a vault, the vault is a non-custodial set up. “This is the whole point of vaults and why it’s different from what you see in traditional finance,” he shared on the Talking Tokens podcast recently.

The benefit here is that users can always see their funds in a vault, 24/7, even if the company providing the service goes down.

“You keep your keys so you can withdraw whenever you want, and nobody can take that from you,” Raghupathi said. “So what we're seeing is centralized exchanges offering decentralized products while preserving the integrity of those products.”

In late January, Kraken said it was launching “Kraken DeFi Earn,” a vault service that would give users access to DeFi yield strategies that could generate up to about 6.5% APY via Veda’s vault infrastructure. Raghupathi views this launch as a “huge upgrade” for centralized exchanges, as it brings decentralized products to a mainstream, centralized platform. 

The Kraken initiative had been brewing for at least six months, and Veda has a number of partnerships in the pipeline for 2026, Raghupathi said. 

“The largest institutions in the world, they all see the writing on the wall,” he said. “DeFi is a source of competitive differentiation and fintechs are using DeFi like a nuclear weapon to outcompete traditional finance. It’s why yield is at the center of the market structure legislation and the hot debates that are going on.” 

While the first quarter of 2026 might not see a ton of fintech announcements on the vault front, Raghupathi thinks we’ll see significant activity near the end of the year as fintech firms and banks and traditional institutions finish their due diligence process in the coming months

Stablecoins have a market cap of about $300 billion across 226 million total holders. As it stands, Veda has over $1.2 billion in total value locked across over 100,000 users. From the funds put in, over $75 million in yield has been generated, according to its website. 

Vaults have touched a fraction of stablecoins’ total market cap, but Raghupathi thinks vaults are going to be as important as stablecoins as a universal tool and will prove to be a “natural extension or successor to stablecoins.”

“If you think of stablecoins as holding dollars, vaults are the way you put that to work, and that’s a massive industry,” he said. “Obviously, all of finance is built not on holding dollars, but on putting dollars to work.”

Check out the next section for more details and the full episode.

For today’s episode, I interviewed Sun Raghupathi, CEO of Veda, about how DeFi evolved from speculation to a robust financial backend for users, fintechs and asset managers. Sun explains why degens were essential beta testers for early DeFi systems, how vault infrastructure bridges the gap between onchain complexity and traditional finance, and why idle balances should automatically generate yield for users instead of enriching banks.

He walks through Veda's growth from serving DeFi projects like Ether.fi to powering yield products for centralized exchanges like Kraken and Coinbase. He also explains why stablecoin yield is the killer use case driving fintech adoption, and how vault infrastructure works across multiple chains.

The conversation covers the net interest margin disruption facing traditional banks, enterprise L2 announcements going quiet, and Sun's advice to DeFi founders on meeting reality where it's at during this critical window for execution.

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Please note this content is for informational and educational purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.