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Kraken has launched native Bitcoin staking through Babylon, offering users BABY token rewards
Users have been able to stake BTC directly on-chain without wrapping, lending, or bridges
The service features a seven-day unstaking period, with weekly payouts to participants

Kraken has launched a new Bitcoin staking service through a partnership with Babylon, giving users the chance to earn rewards without touching their BTC. Unlike traditional staking solutions that often involve wrapping or transferring assets to other chains, Kraken’s approach allows users to retain full on-chain custody of their Bitcoin while participating in a decentralized security network. The staking program is now available globally via Kraken and Kraken Pro, with rewards paid out weekly in Babylon’s native BABY token and a seven-day unbonding period for unstaking.

A New Way to Earn from Bitcoin

For years, the vast majority of Bitcoin has remained dormant, sitting in wallets or on exchanges with its only purpose being to gain value (hopefully!). Kraken is now offering a way to change that by unlocking passive yield potential without compromising custody or decentralization.

The new staking product, powered by Babylon’s “Bitcoin Timestamping” and “Bitcoin Staking” protocols, allows users to delegate BTC to help secure Proof-of-Stake blockchains, all while the coins themselves remain untouched. This means no need for token wrapping, no bridging to other chains, and no reliance on third-party lending platforms, factors that have historically introduced risk or complexity for users:

BTC Staking is here — powered by Babylon, now on Kraken.

Up to 1% APR – paid in $BABY
No bridging, wrapping or lending required
Unlimited staking
Weekly payouts

Put your bitcoin to work https://t.co/OUqlgTKc8G pic.twitter.com/usctmQ9vzH

— Kraken Exchange (@krakenfx) June 19, 2025

Kraken Expanding Bitcoin’s Role in DeFi

With the rise of BTC-native DeFi—sometimes referred to as “BTCFi”—Kraken’s move signals a strategic shift in how the industry is thinking about Bitcoin’s place in the broader crypto economy. Babylon’s model allows Bitcoin holders to contribute to securing newer PoS chains while receiving staking rewards in return, which Kraken’s Global Head of Consumer, sees as a good use of idle Bitcoin:

A substantial amount of Bitcoin currently sits idle on our exchange. That represents a significant opportunity cost for our clients, and a missed opportunity for the broader ecosystem.

The BABY token, which is distributed as part of this mechanism, is paid out to stakers based on inflation within the Babylon protocol, with Kraken noting that staking yields are variable but currently sit around 1% APR.

The development is part of a larger push by Kraken to expand its staking services, which already include assets like Ethereum, Solana, and Polkadot. The addition of Bitcoin staking marks a significant step forward, not just for Kraken, but for the idea that BTC can be more than just a store of value or a passive asset.

The post Kraken Introduces Bitcoin Staking appeared first on FullyCrypto.

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Filed under: Bitcoin - @ June 21, 2025 10:16 am