In an exclusive partnership with Kraken, Babylon staking will soon be made available through Kraken’s platform, enabling customers to earn BABY tokens as rewards for staking Bitcoin. This collaboration enables Kraken users to stake their Bitcoin holdings directly through the exchange, eliminating the need for off-exchange wallets. Babylon’s total value locked (TVL) has recently tanked, plunging by 32%. During the same time frame, investors unstaked $1.2 billion in Bitcoin.

Bitcoin Staking on Kraken

Kraken’s integration with Babylon makes for a simple and powerful way to stake Bitcoin. For a limited time, customers can stake their Bitcoin and earn BABY tokens, Babylon’s native reward token. This partnership simplifies the staking process. No longer do users have to figure out intricate off-exchange wallets just to earn yield on Bitcoin’s proof of work powers.

"a substantial amount of Bitcoin currently sits idle on our exchange... a significant opportunity cost for clients and a missed opportunity for the broader ecosystem" - Mark Greenberg

We’re changing that with this new offering — giving our users a smarter way to earn rewards on their BTC.

Understanding BABY Token Rewards

BABY tokens are the core reward mechanism for the Babylon ecosystem. These tokens are liquidity mining rewards that are given to holders who stake their Bitcoin and BABY tokens. Babylon’s rewards are derived from an annual inflation rate of 8%. Of that, 4% is distributed to BTC stakers and the other 4% to BABY stakers.

For one thing, rewards are paid in BABY tokens, not Bitcoin. The price of BABY has experienced a close to 5% uptick since Kraken’s announcement of integration. A 24-hour BABY price chart gives you additional information about the token’s market activity.

Babylon's Role in BTCFi

This collaboration is an example of the growing trend of BTCFi (Bitcoin Finance). It aims to expand Bitcoin’s use case, outside of its traditional narrative as “digital gold.” Brendon Sedo contended that Bitcoin is maturing beyond the “digital gold” meme due in no small part to the emergence of BTCFi.

"enabling emerging PoS blockchains to benefit from the economic weight of Bitcoin to validate transactions and bolster the security of their networks" - Mark Greenberg

Babylon makes an important contribution to this ecosystem by enabling Bitcoin’s energy to be leveraged to secure other blockchain networks.