Bitcoin does not support native staking as it operates on a proof-of-work model, yet holders can earn yield through various alternative methods. Centralized lending platforms like Binance Earn, Nexo, and Ledn allow users to deposit BTC and earn interest by lending it to institutional borrowers, but this comes with custodial risks. Wrapped Bitcoin (WBTC) enables BTC holders to participate in Ethereum-based DeFi platforms such as Aave and Curve, although it introduces additional risks, including those related to smart contracts and custodial management. Layer-2 solutions like Babylon and Stacks provide avenues for yield generation without requiring BTC to leave the Bitcoin blockchain. Babylon utilizes time-locked scripts, while Stacks employs a proof-of-transfer mechanism that rewards users with Bitcoin. However, the pursuit of yield poses risks, including custodial, smart contract, liquidity, and regulatory challenges. As the yield landscape evolves, ongoing debates continue regarding the alignment of yield generation with Bitcoin’s decentralized ethos.

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