Catenaa, Wednesday, June 25, 2025- Crypto exchange Kraken introduced bitcoin “staking” through an integration with DeFi protocol Babylon, allowing users to earn up to 1% annual percentage rate on their spot BTC holdings without lending, wrapping, or bridging.
The new feature enables Kraken users to delegate their bitcoin to Babylon, which uses time-locked BTC to help secure proof-of-stake blockchains.
Rewards are paid weekly in Babylon’s native BABY token, while clients retain full ownership of their BTC on the Bitcoin blockchain.
Unstaking requires a seven-day lockup, during which no rewards accrue. The service is currently available in select countries, including the US (excluding some states), the UK, Australia, and the UAE.
Kraken Global Head of Consumer Mark Greenberg emphasized that the move unlocks returns on idle BTC while bolstering security for emerging PoS networks.
Kraken is the first major exchange to offer bitcoin staking-style rewards without wrapping or lending, differentiating it from platforms that generate yield by lending client funds, which involve higher counterparty risks.
Babylon’s protocol relies on Bitcoin’s native Taproot scripts to time-lock BTC, enabling cross-chain security for networks such as Ethereum, Solana, Avalanche, and others.
While not native staking on Bitcoin, the protocol acts as bitcoin-backed collateral securing external PoS chains, with rewards paid in non-BTC tokens.
This launch complements Kraken’s recent expansions, including its Ethereum Layer 2 blockchain Ink, commission-free stock trading plans, and a $1.5 billion acquisition of NinjaTrader to broaden multi-asset offerings.
