Kraken and Babylon team up to launch ‘trustless’ Bitcoin staking

Kraken and Babylon have joined forces to launch a groundbreaking staking service that lets users earn rewards without bridging, wrapping, or lending their BTC. This could create a major shift in how Bitcoin can generate passive income while staying securely on its native blockchain.

Crypto exchange Kraken has integrated with Babylon, a leading Bitcoin staking protocol, to offer users a way to stake their idle BTC directly on the Bitcoin network.

Unlike traditional staking methods that require converting Bitcoin into other assets, this new service keeps funds securely locked in a Bitcoin vault while delegating them to secure proof-of-stake (PoS) chains.

The collaboration between Kraken and Babylon eliminates the need for third-party intermediaries, reducing risks associated with cross-chain transfers. Users can now stake their Bitcoin directly from their Kraken wallets, simplifying the process and enhancing security.

How the Kraken and Babylon staking model works

Through Babylon’s protocol, staked Bitcoin helps secure external PoS networks, earning users rewards in BABY tokens—Babylon’s native asset. Since the announcement, the BABY token has surged nearly 5%, reflecting strong market interest in this innovative staking solution.

Key features of the Kraken and Babylon partnership include:

• No bridging or wrapping – Bitcoin remains on its native chain.

• Non-custodial security – Funds stay in a Bitcoin vault, reducing counterparty risk.

• Earn BABY tokens – Rewards are distributed in Babylon’s native asset.

Mark Greenberg, global head of consumer at Kraken, emphasized the significance of this development:

“A substantial amount of Bitcoin sits idle on our exchange, representing a missed opportunity for clients and the broader ecosystem. With Babylon, we’re unlocking new utility for Bitcoin while helping PoS networks benefit from its security.”

Why this is a game-changer for Bitcoin holders

The integration between Kraken and Babylon addresses a long-standing challenge in crypto: how to make Bitcoin productive without exposing it to additional risks. Traditional yield-generating methods often involve smart contract vulnerabilities or centralized lending platforms. Babylon’s solution keeps Bitcoin on its secure base layer while still enabling staking rewards.

This move also strengthens the broader blockchain ecosystem. By allowing Bitcoin to secure PoS networks, Kraken and Babylon are enhancing the economic security of emerging chains while giving BTC holders a new way to earn passive income.

Market reaction and future outlook

The BABY token has already seen a price bump following the announcement, signaling strong investor confidence. Analysts suggest that as more users stake Bitcoin through Kraken and Babylon, demand for BABY could rise further.

However, the service isn’t without risks. Staked Bitcoin is temporarily locked, meaning users must weigh potential rewards against liquidity constraints. Additionally, BABY token volatility could impact overall returns.

Despite these considerations, the partnership between Kraken and Babylon represents a major step forward in Bitcoin utility. As Greenberg noted,

“This is just the beginning—we see huge potential in bringing Bitcoin’s security to more networks.”

Final thoughts: A win for Bitcoin and PoS chains

The collaboration between Kraken and Babylon is more than just a new staking product—it’s a milestone in Bitcoin’s evolution. By enabling native staking, Kraken and Babylon are paving the way for a more interconnected and efficient blockchain ecosystem.

For Bitcoin holders, this means fresh opportunities to earn without compromising security. For PoS networks, it means tapping into Bitcoin’s vast economic weight. One thing is clear: Kraken and Babylon are reshaping how we think about Bitcoin’s role in decentralized finance.