Key takeaways
Though Bitcoin doesn’t support native staking, holders can earn yield through centralized lending platforms, Wrapped Bitcoin (WBTC) on Ethereum, and Bitcoin-related networks like Babylon and Stacks.
WBTC allows BTC holders to participate in lending, liquidity pools and yield farming on Ethereum-based DeFi platforms like Aave and Curve but introduces bridge and smart contract risks.
Protocols like Babylon and Stacks use mechanisms like native time-locked scripts or stacking to offer rewards without removing BTC from the Bitcoin blockchain.
Custodial, smart contract and regulatory risks persist. Bitcoin’s community also remains divided on whether Bitcoin yield generation features align with its decentralized and trust-minimized ethos.
Unlike proof-of-stake (PoS) blockchains like Ethereum or Cardano, Bitcoin relies on proof-of-work (PoW) mining for network security. However, with the rise of decentralized finance (DeFi) and layer-2 innovations, Bitcoin (BTC) holders can now generate passive income