Elastos Announces Arbiter Network for BeL2 Protocol, Opening a New Era of Non-Custodial BTC Finance
Majuro, Marshall Islands, January 6th, 2025, Chainwire
Arbiter Nodes Provide Time-Based Services and Dispute Resolution, Allowing Bitcoin to Remain on Mainnet While Tapping into Smart Contracts Across EVM Blockchains
Elastos, building on its vision of fully decentralized financial services powered by Bitcoin, today announced the public beta release of its Arbiter Network for Bitcoin-Elastos Layer 2 (BeL2). This step marks a major milestone in the growth of the BTCFi ecosystem, making it possible to secure BTC-backed loans, stablecoins, and other advanced smart contract solutions without ever relocating Bitcoin off the main network.
Developed by Elastos—an early mover in SmartWeb technologies—the BeL2 protocol sets up a trustless clearing network that sends proofs rather than assets. Through these cryptographic proofs, smart contracts on EVM-compatible blockchains can verify that BTC remains locked on Bitcoin’s mainnet and use it as collateral. With the introduction of Arbiter nodes, developers and users now gain access to time-based transaction oversight and decentralized dispute resolution—features that clear the path for a new wave of decentralized finance built on Bitcoin’s security.
“The Arbiter Network is the final piece in our BeL2 infrastructure puzzle,” said Sasha Mitchell, Head of Operations at Elastos. “With Arbiter nodes providing trustless oversight and time-based services, we can offer a fully decentralized BTC finance platform—one that builds on Bitcoin’s resilience without depending on centralized custodians.”
How the BeL2 Arbiter Network Works
Under the surface, BeL2 keeps Bitcoin anchored to its original chain while enabling a range of financial operations elsewhere. First, users lock their BTC using dedicated mainnet scripts. This non-custodial model ensures that Bitcoin never needs to be wrapped or moved, preserving its core security properties and owner independence. Once locked, Zero-Knowledge Proofs (ZKPs) affirm the collateral status, allowing external networks to confirm how much BTC is involved without revealing private transactional data.
These ZKPs pass through a decentralized oracle service that conveys proof details—rather than assets—into EVM-based smart contracts. By transferring cryptographic confirmations instead of tokens, BeL2 avoids the pitfalls linked to wrapped BTC. Meanwhile, the newly released Arbiter Network oversees loan terms, coordinates time-based tasks, and resolves any disputes. Arbiter nodes pledge Elastos (ELA)—a reserve currency merge-mined with Bitcoin with up to 50% of its security—to uphold network reliability, earning ELA and BTC fees in return for their role.
This approach offers distinct advantages. Users can be confident that their secured Bitcoin stays under their control on its original chain. Arbiter nodes jointly validate transactions in a decentralized manner, creating a fair environment for everyone. Because the proofs rely on Zero-Knowledge methods, the system preserves strong security and privacy. By supporting EVM-based smart contracts, BeL2 also unlocks wide-ranging DeFi possibilities—spanning simple lending scenarios to more advanced stablecoin setups and beyond.
Beta Release Details
The beta release of the Arbiter Network will progress in stages, starting with reduced collateral limits to maintain stability and gather input from initial participants. During this phase, Arbiters can stake a small amount of ELA or ELA-based NFTs, ensuring enough protection to support fair procedures while the network is put to the test. At first, rewards will be distributed in ELA, with BTC fee structures planned for future updates. A user-friendly dispute resolution portal lets Arbiters track events, approve or challenge transactions, and honor time-based constraints for overall reliability.
“By blending Bitcoin’s security with Elastos’ scalable foundations, we’re establishing a new financial model—a decentralized bank of sorts, powered by code and cryptography,” said Sasha Mitchell. “Our broader aim is a smooth, global financial web that remains anchored to Bitcoin’s trust.”
Broader Implications for BTCFi
By directly connecting each DeFi transaction to Bitcoin’s mainnet, BeL2 removes the need for wrapped BTC setups, lessening complexity and eliminating custodial points. This breakthrough supports various use cases: non-custodial loans, stablecoins that can be redeemed at will, and decentralized trading markets offering both spot and derivative BTC products. With Arbiter nodes providing reliable governance and resolving disputes, the broader BeL2 sphere gains a unified system for organizing multi-party transactions with fairness—an advancement that places Bitcoin at the core of the future’s decentralized financial world.
Additional Information
- Users can learn more about BeL2: https://www.bel2.org/
- Users can join the Arbiter Beta: https://www.arbiter.bel2.org/
- Contact: Email info@elastos.org for partnership inquiries or media requests.
About Elastos
Elastos is a SmartWeb ecosystem builder focused on enabling decentralized application creation and cross-chain connectivity. Built on top of Bitcoin merge-mining, Elastos relies on the security of the world’s largest public blockchain and extends it with additional layers. The introduction of BeL2 and its Arbiter Network marks Elastos’ latest effort to advance a more open, clear, and trustless global financial system.
