The new staking method uses proof-of-stake networks to secure transactions and funds
Kraken has officially launched a new way for users to stake Bitcoin by partnering with Babylon Labs. This move allows users to earn staking rewards without wrapping, lending, or moving their BTC off the Bitcoin blockchain. Instead, the process takes place through Babylon’s protocol, which locks Bitcoin in a secure vault and connects it to proof-of-stake (PoS) networks. The innovation is aimed at giving Bitcoin holders a way to generate returns while keeping their assets native and secure.
Rather than paying rewards in Bitcoin, users receive Babylon’s native BABY token. Since the announcement, the price of BABY has seen a modest uptick, indicating growing interest in the project. According to Kraken’s global head of consumer, Mark Greenberg, a large portion of the Bitcoin held on the exchange sits unused. He sees this idle BTC as a missed opportunity for both users and the broader crypto ecosystem. By enabling staking through Babylon, Kraken gives customers a new utility for their Bitcoin while supporting the security of emerging PoS networks.
BTC Staking is here — powered by Babylon, now on Kraken.
✔️ Up to 1% APR – paid in $BABY
✔️ No bridging, wrapping or lending required
✔️ Unlimited staking
✔️ Weekly payoutsPut your bitcoin to work ⬇️https://t.co/OUqlgTKc8G pic.twitter.com/usctmQ9vzH
— Kraken Exchange (@krakenfx) June 19, 2025
This approach is part of a broader trend known as BTCFi — financial tools built on top of the Bitcoin network. Babylon’s system stands out because it doesn’t require users to convert their BTC or use third-party services. Instead, staking occurs directly through time-locked scripts, which preserve ownership and minimize risks. Rewards come from an 8% annual inflation in the Babylon network, with 4% going to BTC stakers and 4% to BABY stakers.
With this move, Kraken joins the growing effort to give Bitcoin more use cases in decentralized finance. It’s also a sign that BTC is evolving from a passive store of value to a more functional asset within modern financial infrastructure. The staking option is live now and expected to grow in popularity as more users explore new ways to put their BTC to work.
