Kraken Launches Bitcoin Staking on Babylon Protocol
SAN FRANCISCO — US cryptocurrency exchange Kraken has announced a new feature allowing Bitcoin holders to earn rewards via Babylon’s unique staking protocol, marking a significant expansion into Proof-of-Stake (PoS) validation services.
According to a Thursday blog post, Kraken users within specific supported regions can lock their Bitcoin (BTC) on the platform and delegate it as collateral to secure Proof-of-Stake (PoS) networks. Rewards earned for this service will be distributed in Babylon’s native BABY token.
Kraken Global Head of Consumer, Mark Greenberg, highlighted the initiative’s goals. "A substantial amount of Bitcoin currently sits idle on our exchange, representing a significant opportunity cost for clients and a missed opportunity for the broader ecosystem," he stated.
"Our launch allows clients to earn a return on their BTC while enabling emerging PoS blockchains to benefit from the economic weight of Bitcoin, helping them validate transactions and bolster security," the post elaborated.
The new Babylon BTC staking service will be available to Kraken clients in the United States (excluding California, Maine, Maryland, New Jersey, New York, Washington, and Wisconsin), the United Kingdom, Australia, and the United Arab Emirates.
This move follows the US Securities and Exchange Commission (SEC) halting enforcement actions against Kraken and two other firms.
—BACKGROUND—
- Staking: Similar to earning interest on a savings account, staking involves depositing coins or tokens into a network to support its operations (significantly different from the Proof-of-Work system used by Bitcoin). Validators earn rewards in return.
- Babylon Protocol: This Ethereum Virtual Machine (EVM)-compatible network aims to provide liquid staking solutions for Bitcoin, enabling BTC holders to participate in PoS ecosystems without moving their underlying assets. The BABY token serves as its utility and governance token.
- Proof-of-Stake (PoS): The vast majority of blockchains employ this model where token holders commit their assets for network security, winning blocks through a staking mechanism.
- Bitcoin (BTC): The leading cryptocurrency uses Proof-of-Work consensus, making it ineligible for traditional PoS staking. However, protocols like Babylon aim to bridge this gap for compliant yield generation.
—MARKET CONTEXT—
Bitcoin (BTC) recently traded around $104,300. This feature announcement arrives as the cryptocurrency market navigates the United States approaching the Juneteenth holiday.
UPDATE (June 19, 2025, 4:51 p.m. ET): Further context added.
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