Crypto exchange Kraken has teamed up with Babylon Labs to launch a new way for users to earn rewards on their Bitcoin by staking directly on its platform.
This new service started on Thursday and is available on all Kraken platforms. Users do not need to wrap, lend, or use other blockchains to earn rewards. Instead, their Bitcoin stays safely locked in a vault on the Bitcoin blockchain. This keeps full control of their coins while earning rewards.
Kraken confirmed that users can stake their Bitcoin without moving it to outside wallets. The will Bitcoin helps secure proof-of-stake networks through Babylon’s protocol. However, rewards are paid in BABY tokens, Babylon’s native cryptocurrency, not in Bitcoin itself.
At the time of the launch, the BABY token has risen over 1% and is currently trading at around $0.0480.
Mark Greenberg, Kraken’s Global Head of Consumer, said, “A substantial amount of Bitcoin currently sits idle on our exchange. It represents a significant opportunity cost for clients and a missed opportunity for the broader ecosystem.” He added that the new service allows users to earn returns while helping proof-of-stake networks use Bitcoin’s economic strength to secure their chains.
According to the company, the staking process is secured with Bitcoin scripts and cryptographic technology. Users can un-stake their Bitcoin anytime, but there is a seven-day waiting period before their funds become available again.
Babylon’s protocol uses an 8% yearly inflation to pay rewards. Half of which goes to Bitcoin stakers and the other half to BABY token holders. The BABY token can be used to pay fees and vote on protocol changes.
This launch marks an important step for Kraken’s growing staking offerings. The service makes it easier for Bitcoin holders to put their coins to work without losing control or security.
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