Kraken has launched Bitcoin staking through a seamless integration with Babylon, marking a big shift in how BTC holders can put their assets to work without ever leaving the security of the Bitcoin blockchain.

Image Source: Kraken

Native Staking Without Wrapping or Bridging

Traditionally, Bitcoin holders seeking yield faced a tough choice: wrap or bridge their BTC to other blockchains, exposing themselves to additional risks, or leave their assets idle. Through Kraken’s new service, powered by Babylon’s Bitcoin-native staking protocol now users can stake their BTC directly from the Kraken platform, locking it in a secure vault on the native chain while maintaining full ownership and custody. Unlike conventional staking solutions, the underlying Bitcoin is never lent out, instead it stays on the Bitcoin blockchain, delegated via Babylon’s smart contract-based mechanism to help secure emerging Proof-of-Stake (PoS) networks. 

How It Works

1. Staking: Kraken clients can choose to stake their BTC directly from their accounts. 

2. Rewards: Users receive rewards in $BABY, Babylon’s native token. These are distributed weekly, with yields currently up to 1% APR, though rates may fluctuate.

3. Ownership & Security: Clients retain complete ownership of their BTC. The staking protocol is governed by smart contracts, ensuring transparent reward tracking and cryptographic safeguards to detect and penalize malicious actors.

4. Unstaking: Users can unstake at any time, with a standard seven-day unbonding period before funds are returned.

Unlocking Bitcoin’s Untapped Potential

Mark Greenberg, Kraken’s Global Head of Consumer, emphasized the significance of this launch: “A substantial amount of Bitcoin currently sits idle on our exchange, representing a significant opportunity cost for clients and a missed opportunity for the broader ecosystem. With this launch, clients can now earn a return on their BTC while also enabling emerging PoS blockchains to benefit from the economic weight of Bitcoin in order to validate transactions and bolster the security of their networks”. The integration with Babylon not only offers Kraken clients a passive income stream but also strengthens the infrastructure of PoS blockchains, channeling Bitcoin’s economic gravity into securing the next generation of decentralized networks.

Industry Impact

Kraken’s move comes as institutional and retail interest in Bitcoin native DeFi surges. Since Babylon’s Genesis mainnet launch in April 2025, over 57,000 BTC worth more than $5.6 billion have been staked, highlighting the appetite for secure, yield-generating opportunities that don’t compromise on custody or blockchain integrity. With less than 1% of Bitcoin’s total supply currently engaged in DeFi, Kraken’s new offering addresses a massive untapped market, providing a frictionless, trust-minimized way for BTC holders to participate in the evolving crypto economy.

Final Thoughts

Kraken’s launch of Bitcoin staking via Babylon is a game-changer for BTC holders seeking yield without sacrificing security. By removing the need for bridges or wrappers and anchoring staking natively on the Bitcoin blockchain, Kraken is pioneering a new era of Bitcoin utility.