Kraken has integrated Babylon’s protocol to enable native Bitcoin staking, allowing users to earn rewards while maintaining full custody of their BTC. Participants can receive up to 1% annual percentage yield (APY) paid in Babylon’s native BABY tokens without transferring assets off the Bitcoin blockchain.
This innovative model ensures BTC remains on its native chain throughout the staking process—never wrapped, bridged, or lent—enhancing security and preserving decentralization. The integration directly addresses custodial risks while aligning with Bitcoin’s foundational principle of self-sovereignty, setting a new standard for DeFi offerings on centralized exchanges.
Over $5.6 billion worth of BTC has already been staked through Babylon’s mainnet, demonstrating substantial market adoption. While potentially attracting regulatory attention, this solution could catalyze further innovation in native asset staking and reshape cryptocurrency management practices.