Crypto exchange Kraken has launched a new Bitcoin staking feature through a partnership with Babylon Labs. This means Kraken users will be able to earn rewards on their BTC without moving their coins off the Bitcoin blockchain. They can just stake directly on the platform, thanks to integration with staking protocol Babylon.
There’s no need for wrapping, lending, or using other chains. According to the announcement on Thursday, Bitcoin is locked on the native chain and then used to help secure proof-of-stake (PoS) networks.
Kraken confirmed that users do not need to move their Bitcoin to external wallets. Instead, the BTC is placed in a vault and stays on the Bitcoin blockchain throughout the process. Users can start using the service right away.
Instead of getting paid in Bitcoin, users will earn rewards in BABY, the native token of the Bybylon protocol. At the time of writing this report, the BABY token is trading for $0.04889, a 2% surge in the last 24 hours. The token rose nearly 5% after the announcement, but dropped shortly after.
According to Mark Greenberg, Kraken’s Global Head of Consumer: “A substantial amount of Bitcoin currently sits idle on our exchange.” He added, “ It represents a significant opportunity cost for clients and a missed opportunity for the broader ecosystem.”
Greenberg also explained that the new service allows users to earn returns on their Bitcoin and also helps PoS networks become more secure by using Bitcoin’s economic power. Babylon is a Bitcoin-native protocol that lets BTC help secure PoS networks without ever leaving the Bitcoin blockchain.
Kraken said the entire staking process is controlled by Bitcoin scripts and cryptographic security features. Users can unstake their Bitcoin whenever they want, with a standard seven-day wait period before it becomes available again. The service is now available across all Kraken platforms.
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