Kraken Launches Bitcoin Staking with Babylon Protocol, Unlocking New Rewards for BTC Holders
Kraken, one of the most trusted and secure cryptocurrency exchanges, has announced a groundbreaking integration with the Babylon Bitcoin staking protocol, enabling clients to earn passive rewards on their Bitcoin (BTC) holdings. This marks a significant milestone as Kraken becomes one of the first platforms to offer a secure, custodial Bitcoin staking model that supports Proof of Stake (PoS) networks without requiring users to bridge, wrap, or lend their BTC.
Starting today, Kraken clients can stake their Bitcoin directly through the platform by leveraging the Babylon protocol. The process involves locking BTC in a vault on the native Bitcoin blockchain, where it is securely delegated to support PoS networks. In return, users earn rewards in BABY, the native token of Babylon Genesis, the first Layer 1 (L1) network powered by Bitcoin’s economic weight. This innovative approach allows BTC holders to generate returns while maintaining the security and sovereignty of their assets on the Bitcoin blockchain.
Unlocking Bitcoin’s Idle Potential
A considerable portion of Bitcoin remains idle on exchanges, representing a missed opportunity for both users and the broader blockchain ecosystem. According to Mark Greenberg, Kraken’s Global Head of Consumer, “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 Bitcoin’s economic weight to validate transactions and bolster the security of their networks.”
By integrating with the Babylon protocol, Kraken is bridging the gap between Bitcoin’s unparalleled security and the growing demand for decentralized finance (DeFi) solutions. This initiative channels Bitcoin’s economic influence into securing next-generation PoS ecosystems, fostering innovation across the blockchain space.
How It Works: Secure and Transparent Bitcoin Staking
The staking mechanism is designed to prioritize security and transparency. Users’ staked BTC never leaves the Bitcoin blockchain, ensuring that it remains protected by Bitcoin’s robust scripting system. The Babylon protocol facilitates the delegation of staked BTC to PoS networks, with rewards distributed in BABY tokens on the Babylon Genesis chain. These rewards are governed by publicly verifiable on-chain logic, allowing users and third parties to audit the process.
To safeguard against malicious behavior, the protocol incorporates cryptographic measures that penalize harmful actions, ensuring the integrity of the staking process. Clients retain full control over their BTC and can unstake their holdings at any time, with a ~7-day unbonding period before funds become available for withdrawal.
Clayton Menzel, Head of Business Development at Babylon Labs, emphasized the significance of this integration: “Kraken’s integration with the Babylon Bitcoin staking protocol shows how trust-minimized, Bitcoin staking can work at scale. By anchoring staked BTC on the native chain and delegating it to PoS networks, Kraken clients can finally earn rewards without bridges or wrappers, helping preserve Bitcoin’s unmatched security and sovereignty. This launch marks a major step toward a truly BTC-native DeFi landscape.”
Expanding Kraken’s Staking Leadership
This launch represents a notable expansion of Kraken’s staking offerings and reinforces its position as a leader in product innovation within the crypto space. Since introducing custodial staking in 2019, Kraken has enabled millions of users to earn rewards through its Earn platform, which supports a wide range of cryptocurrencies. The addition of Bitcoin staking underscores Kraken’s commitment to providing clients with diverse opportunities to grow their holdings while maintaining the highest standards of security and usability.
The new BTC staking product is now available across all Kraken interfaces, including Kraken and Kraken Pro, making it accessible to both retail and institutional users. This seamless integration ensures that clients can participate in Bitcoin staking with minimal effort, leveraging Kraken’s user-friendly platform and industry-leading custody solutions.
Why This Matters for Bitcoin and DeFi
Bitcoin’s dominance in the cryptocurrency market has long been attributed to its security, decentralization, and store-of-value properties. However, its limited programmability has often excluded it from participating in DeFi ecosystems. The Babylon protocol changes this dynamic by enabling Bitcoin to play a pivotal role in securing PoS networks without compromising its core attributes.
For Bitcoin holders, this development opens up new avenues for earning passive income while contributing to the growth and security of emerging blockchain networks. For the broader ecosystem, it represents a significant step toward integrating Bitcoin into the rapidly evolving DeFi landscape, unlocking its latent potential as a cornerstone of decentralized finance.
A Win-Win for Users and the Ecosystem
Kraken’s Bitcoin staking solution offers a win-win scenario for users and the blockchain ecosystem alike. Clients can now put their idle BTC to work, earning rewards without exposing their assets to the risks associated with wrapping or lending. At the same time, PoS networks benefit from Bitcoin’s economic weight, enhancing their security and scalability.
As the crypto industry continues to evolve, innovations like the Babylon Bitcoin staking protocol highlight the importance of collaboration between established platforms like Kraken and cutting-edge technologies. By bridging Bitcoin’s security with the flexibility of PoS networks, Kraken is paving the way for a more interconnected and resilient blockchain ecosystem.
About Kraken
Kraken is a technology platform built on crypto that unlocks access and reduces inefficiencies to drive financial freedom — for the crypto economy and beyond.
Millions of individuals, professional traders, and institutions around the world use Kraken to trade digital and traditional assets, including cryptocurrencies, national currencies, U.S. futures, and U.S.-listed stocks and ETFs.
Kraken markets can be monitored and traded via the web or through the Kraken and Kraken Pro iOS and Android apps. Futures platforms by NinjaTrader, a Kraken company, are available on desktop, web, and mobile via www.ninjatrader.com.
About Babylon Labs
Babylon Labs focuses on Bitcoin security-sharing protocols with a vision of building a Bitcoin-secured decentralized world. The latest software development is the world’s first trustless and self-custodial Bitcoin staking protocol, which enables Bitcoin holders to stake their BTC on other decentralized systems such as PoS chains, L2s, Data Availability (DA) layers, etc, enabling stakers to earn staking rewards without the need for third-party custody, bridge solutions, or wrapping services. The greater idea is to combine the high security and wide adoption of Bitcoin with the efficiency and scalability of PoS systems, increasing Bitcoin’s utility.
