Kraken Launches Native Bitcoin Staking via Babylon Protocol

Kraken has introduced a groundbreaking feature that allows users to stake their Bitcoin (BTC) natively through the Babylon protocol. This innovation marks a significant milestone in the Bitcoin ecosystem, as it enables BTC holders to earn yield without leaving the Bitcoin network. The new staking service leverages Babylon, a Bitcoin-native protocol, to provide a secure and trustless staking experience. Users retain full control of their BTC while earning rewards in BABY, the native token of Babylon Genesis, for securing Proof-of-Stake (PoS) networks.

Unlike traditional staking methods that require wrapping or bridging BTC into another chain, Kraken's solution allows BTC to be used directly as economic security for PoS networks. This approach not only enhances the utility of Bitcoin but also supports the decentralization and validation procedures of new PoS ecosystems. By staking BTC, users can contribute to the security of these networks while earning passive income, a concept previously unavailable to BTC holders due to its Proof-of-Work (PoW) consensus model.

The staking process is designed to be non-custodial, ensuring that users maintain ownership of their BTC throughout the staking period. The staking script utilizes Bitcoin's built-in system, eliminating the risk of bridge attacks or third-party failures. Users can stake their BTC with a few clicks from their Kraken dashboard, monitor their BABY rewards in real-time, and unstake at any time with a 7-day unbonding period. This level of transparency and security is expected to appeal to both retail clients and institutions looking to utilize idle BTC without leaving the Bitcoin ecosystem.

Mark Greenberg, Global Head of Consumer at Kraken, highlighted the strategic impact of this launch, stating that a substantial amount of Bitcoin currently sits idle on the exchange. With the new staking product, clients can now earn a return on their BTC while enabling emerging PoS blockchains to benefit from the economic weight of Bitcoin. This expansion of Bitcoin's role beyond speculation and storage into infrastructure-level utility is a significant development for the cryptocurrency market.

Babylon's design ties the economic worth of Bitcoin to the performance and security of other chains, making it possible to move value between chains without compromising Bitcoin's decentralization. Clayton Menzel, Head of Business Development at Babylon Labs, emphasized that Kraken's integration with Babylon demonstrates how trust-minimized Bitcoin staking can scale. This launch channels Bitcoin's economic gravity into securing the next wave of PoS ecosystems and marks a major step toward a BTC-native DeFi landscape.

BABY, the reward token for stakers, also serves governance and utility roles within the Babylon ecosystem. Users can participate in Babylon governance, access BTCFi services, and earn further staking incentives. This creates a feedback loop between Bitcoin holders and Babylon-based applications, driving deeper integration between Bitcoin and PoS-based DeFi systems. The availability of BTC staking through Babylon on Kraken's main and Pro interfaces, without the need for extra wallet setup, ensures a seamless experience for users. This move positions Kraken at the forefront of staking innovation, offering direct, verifiable BTC staking on a public platform.