- Kraken users can stake native BTC through Babylon without wrapping, bridging, or lending—directly on the Bitcoin network.
- Rewards are paid in BABY tokens, with a 7-day unbonding period and no cross-chain movement required.
For some Bitcoin owners, the idea of earning a return on their assets often ends in a dead end. Usually, they are asked to wrap their BTC into another form, move it to a different network, or even lend it out—which, let’s face it, not everyone is comfortable with the risks.
Well, Kraken seems to want to change this old approach by launching a native BTC staking feature directly through the Babylon protocol. No wrapping, no bridges, and most importantly, it remains entirely on the Bitcoin network.
Native Bitcoin Staking, No Bridge Needed
The feature is now available to Kraken users in several regions such as the UK, Australia, the UAE, and most of the United States (although there are still some states that are not yet eligible for it).
How it works, the user’s BTC is locked into the Bitcoin network via the Taproot time-lock, then used to help secure the Babylon-powered proof-of-stake network. In return, users will receive BABY tokens instead of BTC, with an estimated annual yield ranging from 0.5% to 1%. It’s not much, but for BTC that has been ‘hanging out’ in a wallet, it’s not bad.
Furthermore, this staking is equipped with an unbonding mechanism for around seven days. This means that when you decide to stop staking, it will take a week before your BTC can be withdrawn.
But on the other hand, this system provides extra security because it continues to operate entirely within the Bitcoin network, without involving moving assets to another blockchain. So, for those who are a bit traumatized by the case of the bridge that was hacked, this is good news.
Kraken’s Busy Year: From Futures to Staking
However, this is not the only breakthrough by Kraken during the first half of this year. In March, CNF reported that Kraken had acquired NinjaTrader, a derivatives trading platform, to expand its operations into futures trading and attract more users from traditional financial markets.
By utilizing NinjaTrader’s Futures Commission Merchant (FCM) license, Kraken is now directly under the supervision of the CFTC—which means they can play in the futures realm with a clear legal footing.
Then, there is also the collaboration with Mastercard which was announced in early April. The partnership will allow crypto users in the UK and EU to transact at over 150 million payment points using a new feature called Kraken Pay.
In just three months, over 200,000 users have activated their “Kraktag” feature—a feature that allows crypto transfers to happen as quickly as sending a text message. Kraken Pay itself supports over 300 currencies, both fiat and crypto.
However, this latest development regarding BTC staking has also been part of Kraken’s strategy since January, when they relaunched on-chain staking services for 17 crypto assets such as ETH, SOL, DOT, and ADA in 39 US states. They even equipped the system with third-party slashing insurance protection and stated that they would continue to expand support depending on applicable regulations.
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