Cryptocurrency exchange Kraken has announced the launch of a new bitcoin staking service, marking a significant step towards increasing involvement in Bitcoin-native DeFi.
New Staking Service from Kraken
On June 19, Kraken announced the launch of a new staking service for users, allowing them to earn yields on their bitcoins without moving them off the blockchain. This service is powered by Babylon's smart contract-based infrastructure, enabling clients to delegate their BTC to secure proof-of-stake (PoS) blockchains and earn rewards in BABY, Babylon's native token. This approach is unique as it allows owners to retain ownership of their BTC on-chain.
Security and Convenience of Staking
According to Mark Greenberg, Kraken's global head of consumer, 'a substantial amount of Bitcoin currently sits idle on our exchange'. The new service allows clients to 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. Users can expect yields of up to 1% APR, with BABY rewards distributed weekly.
Impact on the DeFi Market
With this integration, Kraken joins other major players like Binance and BitGo who are also tapping into the Babylon ecosystem. Since Babylon's Genesis mainnet went live in April 2025, over 57,000 BTC worth over $5.6 billion has been staked through the platform, indicating strong institutional demand for bitcoin yield solutions. Babylon's model aims to lower barriers to DeFi participation for bitcoin while expanding its utility without compromising security.
The launch of Kraken's bitcoin staking service represents an important step in the evolution of Bitcoin-native DeFi, potentially increasing the level of Bitcoin's involvement in decentralized finance.
