Kraken has introduced Bitcoin staking through Babylon integration, marking the exchange’s first offering that allows clients to earn yield on their BTC holdings without moving them off the Bitcoin blockchain.
The announcement, published in a June 19 blog post, positions Kraken alongside a growing wave of institutions leveraging Babylon’s staking infrastructure. This integration allows Kraken customers to use Babylon’s protocol to assign their Bitcoin (BTC) to proof-of-stake (PoS) blockchains while retaining complete ownership of their assets, a significant development for Bitcoin holders looking to enhance their returns.
Historically, staking solutions have often come with drawbacks, especially in the realm of Bitcoin. Traditional methods frequently necessitate wrapping or bridging Bitcoin to other networks, leading to complexities and security concerns. Kraken has sidestepped these issues by ensuring that the underlying Bitcoin remains firmly on the Bitcoin blockchain, avoiding the pitfalls of lending or rehypothecating BTC. This innovation is designed to provide better security and peace of mind for investors.
Through Babylon’s smart contract-based delegation mechanism, the staked assets play a crucial role in securing PoS networks. In return, users are rewarded with BABY, the native token of Babylon, creating a reliable avenue for earning passive income. The service incorporates a seven-day unbonding period, transparent reward tracking, and cryptographic penalties for bad actors, ensuring a robust security layer for participants.
Mark Greenberg, Kraken’s global head of consumer, emphasized the strategic importance of this service. He noted, “A substantial amount of Bitcoin currently sits idle on our exchange. Clients can now earn a return while strengthening the infrastructure of emerging PoS blockchains.” This perspective highlights the dual benefits of staking—enabling users to generate returns while contributing to the overall health of the blockchain ecosystem.
Kraken’s initiative aligns with a notable trend in the cryptocurrency industry, as platforms such as Binance and BitGo have also tapped into Babylon’s infrastructure to provide native Bitcoin yield opportunities. Since its launch in April 2025, Babylon’s Genesis mainnet has seen over 57,000 BTC staked, equivalent to more than $5.6 billion. This figure underscores the increasing institutional interest in Bitcoin-native decentralized finance (DeFi) protocols, signifying a shift toward broader adoption of Bitcoin in various blockchain applications.
Despite Bitcoin being one of the most prominent cryptocurrencies, less than 1% of its total supply has been involved in DeFi activities. This limitation has primarily stemmed from the technical complexities and security risks associated with bridging BTC to other chains. By facilitating trustless delegation from Bitcoin to PoS networks, Babylon’s approach minimizes such frictions, thereby expanding BTC’s utility within the wider cryptocurrency ecosystem.
Currently, Kraken’s new staking service is available across all interfaces, including Kraken Pro, offering yields of up to 1% APR, with BABY rewards distributed weekly. However, it’s essential for users to be aware that staking involves risks and may be subject to regional restrictions, as with many cryptocurrency services. Following the announcement, BABY token prices experienced a nearly 5% uptick but have since normalized, reflecting typical market reactions to new offerings in the crypto space.