While Bitcoin does not support native staking due to its proof-of-work (PoW) mechanism, holders can still earn yield through alternative methods. Centralized lending platforms, such as Binance and Nexo, allow users to earn interest by lending their BTC, though this comes with custodial risks. Additionally, Wrapped Bitcoin (WBTC) enables Bitcoin holders to participate in Ethereum-based decentralized finance (DeFi) protocols. Other innovative options include layer-2 solutions like Babylon and Stacks, which allow users to earn rewards without having to move their BTC away from the Bitcoin blockchain. These protocols employ techniques like time-locked scripts and proof-of-transfer to generate yield. However, risks such as custodial, smart contract, liquidity, and regulatory issues persist, and the Bitcoin community remains divided on yield generation and its alignment with Bitcoin’s ethos. Overall, the landscape for earning yield on Bitcoin is evolving, driven by technological advancements in DeFi and layer-2 solutions.

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