Kraken Launches Bitcoin Staking Service With 1% APR Yield

Kraken, a leading cryptocurrency exchange, has launched a Bitcoin "staking" service that leverages the Babylon protocol. This innovative service allows users to stake their Bitcoin directly through Kraken, earning rewards without the need for cross-chain bridges, wrapping, or lending. The staked BTC remains on the Bitcoin mainnet, secured by the Taproot time lock mechanism, ensuring the safety of users' self-custodied assets. Rewards are distributed in the native Babylon token, BABY, with a maximum annualized yield of 1%.

This feature is currently available to users in the United States (excluding certain states), the United Kingdom, Australia, and the United Arab Emirates. Kraken emphasizes that this initiative transforms idle Bitcoin into an economic security foundation for proof-of-stake (PoS) networks, marking the first mainstream exchange-supported BTC staking reward scheme that does not require wrapping or lending.

Arjun Sethi, Co-CEO of Kraken, commented on the launch, stating that Bitcoin has traditionally been seen as an un-stakeable asset due to a lack of infrastructure. The emergence of protocols like Babylon has opened up a new path for earning yield on Bitcoin without relinquishing control over the assets. This integration with Babylon's protocol ensures that the underlying Bitcoin remains on the Bitcoin blockchain, avoiding the risks associated with traditional staking solutions such as rehypothecation or lending out the staked assets.

Through Babylon’s smart contract-based delegation mechanism, staked assets help to secure PoS networks. In return, users receive rewards in BABY, Babylon’s native token. The service includes a seven-day unbonding period, transparent reward tracking, and cryptographic penalties for bad actors, ensuring a secure and transparent staking process. This allows users to earn returns on their Bitcoin holdings reliably.

Mark Greenberg, Kraken’s global head of consumer, highlighted the significance of this launch, noting that a substantial amount of Bitcoin currently sits idle on the exchange. Clients can now earn a return while strengthening the infrastructure of emerging PoS blockchains. This move positions Kraken alongside other platforms that have embraced Babylon’s infrastructure to offer native Bitcoin yield opportunities.

The launch of Kraken’s Bitcoin staking service is part of a broader trend of institutions leveraging Babylon’s staking infrastructure. Over 57,000 BTC, worth over $5.6 billion, have already been staked on Babylon’s Genesis mainnet since it launched in April 2025. This demonstrates growing institutional interest in Bitcoin-native decentralized finance protocols. Until now, less than 1% of Bitcoin’s total supply has been involved in DeFi, primarily due to the technical complexity and security risks of bridging BTC to other chains. By enabling trustless delegation from Bitcoin to PoS networks, Babylon’s approach reduces those frictions while extending BTC’s utility in the broader crypto ecosystem.

Kraken’s new staking service is now live across all interfaces, including Kraken Pro. Staking yields up to 1% APR, with weekly BABY rewards, though rates may vary. The company noted that staking involves risk and is subject to regional restrictions. This service provides a new avenue for Bitcoin holders to earn passive income while contributing to the security and stability of PoS networks. The integration with Babylon’s protocol ensures that the staking process is secure, transparent, and aligned with the principles of decentralized finance.