Last updated on June 24th, 2025 at 11:33 am
In a move that deepens institutional involvement in Bitcoin-native DeFi, Kraken has introduced a new staking service allowing users to earn a yield on their Bitcoin without moving it off the Bitcoin blockchain.
Announced in a June 19 blog post, Kraken’s latest offering is powered by Babylon’s smart contract-based infrastructure, marking the first time the exchange supports Bitcoin staking directly on the Bitcoin network. The service enables clients to delegate their BTC to secure proof-of-stake (PoS) blockchains and earn rewards in BABY, Babylon’s native token.
Unlike traditional staking models that rely on wrapped assets or bridges, Kraken’s solution maintains BTC ownership on-chain. This approach sidesteps the risks of rehypothecation, lending, or cross-chain vulnerabilities, offering a more secure and decentralized alternative.
“A substantial amount of Bitcoin currently sits idle on our exchange,”
said Mark Greenberg, Kraken’s global head of consumer.
“Now, clients can put their assets to work and earn a return while supporting the infrastructure of emerging PoS ecosystems.”
The staking process features a seven-day unbonding period, transparent reward monitoring, and cryptographic penalties for dishonest validators. According to Kraken, users can expect yields of up to 1% APR, with BABY rewards distributed weekly. However, returns are variable, and the service is subject to regional availability.
With this integration, Kraken joins other major players, such as Binance and BitGo, that have tapped into Babylon’s ecosystem. Since Babylon’s Genesis mainnet went live in April 2025, over 57,000 BTC—worth more than $5.6 billion—has been staked through the platform, signaling strong institutional demand for native Bitcoin yield solutions.
Babylon Genesis is Live: Secured by Bitcoin to Unite the Decentralized World
Babylon Genesis, the world’s first L1 blockchain secured by Bitcoin, officially launches today.
This launch cements the Babylon Bitcoin staking protocol as the foundational infrastructure layer for… pic.twitter.com/tPXa8npbWH
— Babylon (@babylonlabs_io) April 10, 2025
Historically, less than 1% of Bitcoin’s total supply has been involved in DeFi due to the risks and complexity of bridging. Babylon’s model aims to lower those barriers, expanding BTC’s utility in decentralized finance without compromising its core security principles. The staking service is now available across Kraken’s interfaces, including Kraken Pro.
Meanwhile, a massive unstaking event rocked Babylon, leading to a staggering $1.26 billion worth of BTC being withdrawn and slashing its total value locked (TVL) by 32%.
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