How to Stake Bitcoin (BTC) in 2025 – Is It Even Possible?
Bitcoin operates on a proof-of-work (PoW) mechanism, unlike proof-of-stake (PoS) blockchains. Bitcoin holders can earn passive income through methods such as centralized lending, Wrapped Bitcoin (WBTC) on Ethereum, and layer-2 solutions like Babylon and Stacks. Centralized lending platforms allow users to deposit BTC and earn interest, but carry custodial risks. WBTC enables participation in Ethereum DeFi protocols. Layer-2 platforms enhance Bitcoin's utility; Babylon locks BTC in time-locked scripts, while Stacks uses a proof-of-transfer model to reward STX holders with BTC. Coinbase launched the Bitcoin Yield Fund (CBYF) for institutional investors, targeting annual returns of 4-8%. Earning yield on BTC involves risks from third-party services and may evolve with future innovations, though some purists express concern over potential dilution of Bitcoin's value as hard money.
