Kraken Breakthrough: Trade with Leverage Using Tokenized Stocks as Collateral
Kraken is blurring the lines between TradFi and DeFi by allowing eligible users to deploy tokenized stocks and ETFs as collateral for futures and margin trading. This feature enables traders to maintain their long-term holdings in assets like Nvidia or Tesla while simultaneously accessing leveraged positions, maximizing capital efficiency.
To manage market volatility, Kraken has implemented a risk-based 'haircut' system for all eligible assets. While broad-market ETFs enjoy a minimal 10% haircut, more volatile individual stocks face a 30% discount, ensuring the platform remains resilient during market fluctuations as it integrates real-world assets into the crypto trading experience.
The initial rollout supports 10 major assets, including Apple, Nvidia, Tesla, the SPDR S&P 500 ETF, and the Invesco QQQ Trust. To account for risk, Kraken applies a collateral haircut: broad-market ETFs receive the lowest haircut at 10%, whereas highly volatile stocks like Robinhood are subject to a 30% discount.
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