Kraken Launches Bitcoin Staking Product With Babylon Labs 5% BABY Token Gain

Crypto exchange Kraken has introduced a new Bitcoin staking product through a partnership with Babylon Labs. This integration allows Kraken's users to earn interest on their Bitcoin holdings without the need for bridging, wrapping, or lending out their assets. The Bitcoin is locked in a vault on the Bitcoin blockchain and delegated to secure proof-of-stake (PoS) networks through the Babylon protocol. Users earn Babylon’s BABY token as rewards, which has seen a price increase of nearly 5% since the announcement.

Mark Greenberg, global head of consumer at Kraken, noted that a substantial amount of Bitcoin currently sits idle on the exchange, representing a significant opportunity cost for clients and a missed opportunity for the broader ecosystem. Through the Babylon integration, clients can now earn a return on their Bitcoin, while also enabling emerging PoS blockchains to benefit from the economic weight of Bitcoin to validate transactions and bolster the security of their networks.

Clayton Menzel, Head of Business Development at Babylon Labs, highlighted the trust-minimized nature of the Bitcoin staking process, which allows for scalability. By anchoring staked BTC on the native chain and delegating it to PoS networks, Kraken clients can earn rewards without the need for bridges or wrappers, preserving Bitcoin’s security and sovereignty. This launch is seen as a major step toward a truly BTC-native decentralized finance (DeFi) landscape, channeling Bitcoin’s economic gravity into securing the next wave of PoS ecosystems.

The BTC staking product is now available across all Kraken platform interfaces, including Kraken and Kraken Pro, providing clients with a seamless and secure way to earn passive income on their Bitcoin holdings. This integration not only offers financial benefits to Kraken users but also contributes to the broader ecosystem by enhancing the security and validation of PoS networks through the economic weight of Bitcoin.