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- Kraken users can now stake Bitcoin natively and earn BABY tokens.
- The BABY token surged nearly 5% after the service launch.
- Bitcoin remains on-chain, secured by Babylon’s native vaults.
Kraken has officially launched a new staking service that brings native Bitcoin staking to its platform. The integration is powered by Babylon, a Bitcoin-native protocol that allows staking directly on the Bitcoin blockchain. This marks a major shift in Kraken’s product offering and a milestone for the broader BTCFi ecosystem.
This time around, users are able to lock their Bitcoin via Kraken without the need to wrap or lend it. Rather than relying on bridges or turning Bitcoin into a different form, the platform conducts everything in an on-chain manner. Staked BTC stays in a safe vault powered by smart contracts developed by Babylon. The users receive BABY tokens, which is the native asset of Babylon, as a staking reward.
New feature is now on across all of Kraken’s user interfaces. Staking tool can be accessed by clients using both the standard app and Kraken Pro. When users opt to unstake their Bitcoin, a seven-day unbinding period applies. Funds remain within the Bitcoin network so as to provide complete control and transparency throughout the process for users.
Babylon Lets Bitcoin Support PoS Networks
This native staking model is a game changer and it signifies how far Bitcoin has come in the DeFi world. Since its invention, Bitcoin has been more of a store of value, something that is held but not used. Presently there are services like Babylon that are providing better use of digital currency without distracting from its initial plan.
With the help of smart contracts, Babylon Bitcoin that has been staked will be used to help in securing other PoS networks. 8% is set as the annual inflation rate, which is split equally between sending half to BTC stakers and half to holders of BABY. The token, BABY functions dually; it serves as a governance token and a medium to pay transaction fees on the Babylon system.
Following Kraken’s announcement, the price of BABY went up almost 5% in just a short while. Observers explained that by implying rising confidence in Babylon technology and Kraken strategy. This growth could potentially offer interesting opportunities for investors who are looking for passive income within the Bitcoin blockchain system.
Kraken Steps Into BTCFi to Drive Participation
With the increase in Bitcoin DeFi globally, sometimes referred to as BTCFi, their usage is on the rise. However, there is no wide involvement of people in it up till this time. Presently approximately 0.8% of the total supply of Bitcoin is taking part in DeFi protocols only. This represents a huge amount of unused capital.
This is what Kraken’s BTCFi initiative targets and they are not the first to follow the trend. This opinion seems to be in line with projects like Stacks and Rootstock, which are bitcoin based DeFi platforms. They all strive to help Bitcoin become a more active participant in decentralized finance.
Staking tool of Kraken is just one more option for Bitcoin holders to earn and participate carved on the native blockchain yet. A new era in the utility of Bitcoin is born; it is secure, on-chain, and earns.
Related Reading: Bitcoin’s Next Big Move: Will BTC Surge to $118K or Continue Consolidating?
