Why Kraken Is Betting Big on Onchain Vaults | John Zettler & Sun Raghupathi

Watch on YouTube ↗  |  January 26, 2026 at 14:00  |  1:03:23  |  Empire
Speakers
Jason Yanowitz — Co-Founder, Blockworks
John Zettler — Director of Product, Kraken
Sun Raghupathi — Co-founder, Veda

Summary

John Zettler of Kraken and Sun Raghupathi of Veda join Empire to explain onchain vaults, how they package DeFi lending and yield strategies, and why they expect vault adoption and DeFi TVL to grow. They discuss vault mechanics, key parties like curators and risk managers, business models, risk buckets, and comparisons to BlockFi and Celsius. The conversation covers Kraken's vault launch with Veda, Chaos Labs, and Centaura, plus DeFi's shift to backend infrastructure for fintechs. Speakers also address institutional compliance use cases, Morpho's vault model versus Veda's, and the migration of RWAs onchain.

  • Onchain vaults are described as a layer above DeFi that packages lending and yield strategies with compliance and risk controls.
  • John Zettler and Sun Raghupathi predict strong vault growth, with 2026 called "the year of the vault."
  • Kraken is launching DeFi Earn vaults with Veda and risk managers Chaos Labs and Centaura.
  • Vault yield comes from overcollateralized onchain borrowing, mainly stablecoin demand for leveraged long positions.
  • Key vault risks include bad debt, liquidity and withdrawal constraints, and smart-contract or cyber risk.
  • Speakers differentiate vaults from failed CeFi yield products like BlockFi and Celsius by emphasizing transparency and non-custody.
  • The discussion covers DeFi becoming backend infrastructure, fintech hybridization, institutional compliance use cases, and RWA migration.
  • Morpho's vault model is compared with Veda's multi-chain, multi-protocol model.
Ideas
Jason Yanowitz Co-Founder, Blockworks 0:48
Onchain vaults will become top DeFi narrative.
Onchain vaults will grow from about $6B to $15B and become one of DeFi's top narratives, as asset managers increasingly need a vault strategy. He later adds that major traditional asset managers are already discussing entering the vault business, reinforcing the adoption thesis.
Onchain vaults HIGH
John Zettler Director of Product, Kraken 1:19
Vault growth will exceed expectations.
He takes the over on $15B vault growth and expects 2026 to be the year of the vault. Embedded wallets and vault infrastructure are now in place, and fintechs are starving for yield as Fed rates decline, so Kraken's launch should be one of many.
Onchain vaults HIGH
Sun Raghupathi Co-founder, Veda 2:15
DeFi yield will spread everywhere.
DeFi yield will go everywhere and all assets will move onchain as vaults snowball from early adopters to everyone. He expects an absurd year with a fatter second half and calls 2026 the year of the vault.
DEFI HIGH
Sun Raghupathi Co-founder, Veda 24:05
Consumer DeFi frontends face hard battle.
Building consumer DeFi frontends or neo-banks such as EtherFi and Plasma to compete with large exchanges and fintechs is a very hard, expensive battle that requires luck. Infrastructure providers going to enterprise are better positioned.
ETHERFI XPL MED
Sun Raghupathi Co-founder, Veda 45:32
RWAs will move onchain.
Over the next five years, RWAs will move onchain because there is a much larger asset universe outside crypto, changing the set of yield primitives and driving convergence between traditional and onchain capital markets.
RWAs MED
John Zettler Director of Product, Kraken 58:10
DeFi TVL and users will 10x.
DeFi TVL will explode as the DeFi mullet goes mainstream. The key watch item is whether borrow demand keeps yields high, but if yields compress that will spur more DeFi borrow products. He also expects DeFi and fintech to hybridize, making DeFi the backend and 10xing DeFi and onchain users.
DEFI HIGH
Sun Raghupathi Co-founder, Veda 61:31
Vaults are key for institutional DeFi.
In the long run, vaults will be the only way regulated institutions can interact with DeFi because institutions need to impose risk controls and compliance on permissionless DeFi. Vaults will play a central role in how DeFi is regulated.
Onchain vaults HIGH
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This Empire video, published January 26, 2026, features Jason Yanowitz, John Zettler, Sun Raghupathi discussing Onchain vaults, DEFI, ETHERFI, XPL, RWAs. 7 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Jason Yanowitz, John Zettler, Sun Raghupathi  · Tickers: Onchain vaults, DEFI, ETHERFI, XPL, RWAs