Kraken launches kHYPE backed 1:1 by HYPE

Kraken launched kHYPE on September 8, 2026. It is an ERC-20 token backed 1:1 by HYPE held in Kraken custody. The token is available at launch for use with decentralized applications on Ink.

When kHYPE is minted, Kraken holds an equivalent amount of HYPE in custody. Kraken has published both the kHYPE smart contract on Ink and the HYPE custody address, allowing users to compare the token supply with the assets held in reserve.

This makes kHYPE different from buying an unrelated token with a similar price target. Each kHYPE represents HYPE held by Kraken. Kraken Listings also states that holders can redeem kHYPE for HYPE at a 1:1 ratio at any time.

The immediate use case is access to DeFi on Ink. Native HYPE does not automatically work inside applications built for another network. Wrapping it as an ERC-20 token gives developers an asset they can integrate into Ink applications while preserving a direct reserve relationship with HYPE.

Availability on Ink does not mean every DeFi application will support kHYPE. Users still need to check whether a protocol accepts the token, what actions it supports and whether geographic restrictions apply. Kraken says it plans to extend kHYPE compatibility to additional networks, but the official announcement only confirms Ink at launch.

The reserve addresses improve transparency, but they do not remove risk. kHYPE is a wrapped token rather than native HYPE, and Kraken notes that wrapped tokens carry risks in addition to the usual risks of holding cryptoassets. Its value and usability depend on the backing, custody and redemption arrangement continuing to work as intended.

Users should distinguish between three separate facts: kHYPE is backed 1:1 by HYPE, its reserves can be inspected onchain, and it can be used with supported DeFi applications on Ink. None of those points guarantees a return, uninterrupted liquidity or support from every Ink protocol.

For HYPE holders who already intend to use Ink applications, kHYPE provides a Kraken-issued route without exchanging their HYPE exposure for an unrelated asset. Users who only want to hold HYPE may not need the additional wrapped-token layer.

Sources: Kraken official blog, Kraken Listings announcement, redemption explanation, kHYPE contract and HYPE custody address.