Kraken Unveils Native Bitcoin Staking With Babylon: Details

TLDR:

Kraken Bitcoin staking pays 1% APR in BABY without wrapping or losing custody.
Users can time-lock native BTC directly to earn yield from Babylon PoS networks.
BABY token saw a sentiment spike after the announcement, but near-term volatility remains.
Kraken handles bonding and rewards automatically, simplifying access for conservative users.

Kraken has launched a new feature allowing users to stake Bitcoin (BTC) directly through its integration with Babylon, a DeFi protocol. 

The move introduces a way to earn passive yield on native BTC without the need for wrapping, bridging, or lending. This development is accessible to users in the U.S. (with some state restrictions), the UK, Australia, and the UAE. 

The yield, capped at 1% APR, is paid out in Babylon’s native token, BABY. Kraken aims to streamline the process by managing the technical components behind the scenes.

Native Bitcoin Staking Now Available on Kraken

This integration introduces staking on native BTC, which has long posed challenges due to Bitcoin’s proof-of-work design. 

By partnering with Babylon, Kraken allows BTC holders to secure Babylon-supported proof-of-stake (PoS) networks. Instead of lending or locking assets in wrapped tokens, users can now time-lock their BTC directly on-chain.

Kraken has integrated with DeFi protocol Babylon to offer BTC staking with up to 1% APY — without wrapping, bridging, or lending. Available to users in the U.S. (excluding certain states), UK, Australia, and UAE, the service time-locks native BTC to secure Babylon-supported PoS…

— Wu Blockchain (@WuBlockchain) June 20, 2025

Kraken highlighted that the staking process is seamless and does not require users to give up custody. 

Users only need to deposit or purchase BTC on the platform and enable staking under the “Earn” tab. Rewards are calculated daily and distributed weekly in BABY tokens.

Following the announcement, market watchers noted a sharp reaction from the BABY token. 

According to a post by @AlvaApp, social sentiment around BABY surged, with increased discussion about its tokenomics and upcoming burns. Indicators like MACD showed upward momentum, though CRSI readings above 88 indicated potential for a near-term pullback.

Despite the rally, Alva warned that declining volume and open interest might suggest short-term volatility if the excitement fades. Nevertheless, the growing narrative around Babylon’s DeFi utility and BTC integration kept community discussions active.

Simple Setup, No Custody Risks

Kraken emphasized that staking BTC through its platform does not involve relinquishing control of the asset. 

Instead, users participate in Babylon’s PoS networks while their Bitcoin remains secure. The platform handles bonding, network participation, and reward distribution automatically.

This model appeals to Bitcoin holders who want yield without converting assets into altcoins or wrapped tokens. Kraken’s approach also avoids exposure to third-party lending platforms, minimizing risk.

Available across key markets, the service positions Kraken as an early mover in native BTC staking solutions. By simplifying access and eliminating technical barriers, Kraken aims to attract more conservative crypto investors.

As Babylon expands its ecosystem, Kraken users may gain exposure to future airdrops or additional rewards.