Kraken has introduced the ability to stake Bitcoin through the integration with Babylon, allowing users to earn BABY tokens while keeping their BTC secure.
How It Works
Users can stake BTC directly in a custodial vault governed by Bitcoin scripts, eliminating the need for bridging or wrapping. The BTC remains secured on the Bitcoin blockchain while being delegated to Proof-of-Stake networks via Babylon. Rewards are paid in BABY tokens, with estimated annual returns ranging from 0.5% to 1%, distributed weekly.
Benefits & User Experience
Key benefits of this solution include:
* **Maintain BTC security**: Your Bitcoin never leaves the blockchain; staking is managed with self-custodial, time-locked outputs. * **Earn while supporting PoS networks**: According to Kraken's Head of Asset Growth, idle BTC represents lost opportunity—now it can earn returns while strengthening emerging PoS ecosystems. * **Flexible access**: Clients can unstake at any moment, with tokens becoming available after a roughly 7-day unbonding period.
What Users Should Know
This product is available in eligible regions, including the UAE. There are no transaction fees—Kraken takes a commission (10-26%) from the rewards earned. Potential risks include variable rewards, slashing, hacks, or market volatility—standard staking risks apply.
In conclusion, Kraken's partnership with Babylon makes Bitcoin staking more accessible and secure for users, providing opportunities to earn tokens with minimal risks.
