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Elastos has announced the public beta release of its Arbiter Network, the final piece in its Bitcoin-Elastos Layer 2 (BeL2) infrastructure. The launch represents a major leap for BTCFi—the emerging sector of Bitcoin-backed decentralized finance—by enabling Bitcoin to power smart contracts across EVM-compatible blockchains without ever leaving its native chain. Through the Arbiter Network, Bitcoin holders can now access decentralized lending, stablecoins, and financial protocols while maintaining full mainnet custody of their BTC.
Bitcoin Stays on Mainnet, Smart Contracts Go Global
The BeL2 protocol, developed by Elastos, avoids the traditional pitfalls of wrapped BTC and custodial intermediaries by introducing a trustless clearing system. Instead of moving Bitcoin across chains, BeL2 transmits cryptographic proofs that confirm BTC has been locked securely on Bitcoin’s mainnet. These Zero-Knowledge Proofs (ZKPs) are read by EVM-based smart contracts, unlocking decentralized financial functionality on Ethereum-compatible networks—without compromising Bitcoin’s core principles of sovereignty and security. Sasha Mitchell, Head of Operations at Elastos, emphasized the significance of the new system: “The Arbiter Network is the final piece in our BeL2 infrastructure puzzle. 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 Arbiter Network Works
BeL2 begins with users locking BTC on the Bitcoin mainnet using secure script-based contracts. These transactions are then transformed into ZKPs—private, verifiable data sets—that confirm the Bitcoin is locked without revealing sensitive details. The proofs are relayed through a decentralized oracle system and interpreted by smart contracts on EVM chains. What makes this system distinct is that no Bitcoin ever leaves the main chain. Instead, assets remain under the user’s control, while functionality expands across multiple networks. The Arbiter Network introduces a new layer of governance and time-based transaction support. Arbiter nodes validate conditions such as loan duration, collateral expiry, and dispute outcomes. In return, these nodes earn ELA (Elastos’ native currency) and later BTC-denominated fees for their role. To ensure fairness and decentralization, each Arbiter stakes ELA or ELA-based NFTs, maintaining skin in the game while overseeing protocol integrity.
Benefits for BTCFi Users
This setup offers multiple benefits. Users retain direct custody of their BTC, eliminating the counterparty risk associated with custodial bridges and wrapped tokens. The use of ZKPs maintains both privacy and security while ensuring full verifiability of locked collateral. The Arbiter Network introduces fairness into decentralized agreements, handling everything from dispute resolution to enforcing time-sensitive terms like loan periods or unlock windows. Additionally, developers can now build complex DeFi products—such as non-custodial stablecoins, perpetual contracts, and lending protocols—all secured by real Bitcoin on the mainnet. In doing so, BeL2 opens up the vast liquidity of Bitcoin to the programmable world of EVM without compromising decentralization.
Beta Release Details
The Arbiter Network beta is now live and will progress through structured phases to ensure stability and scalability. During the initial stage, Arbiter nodes will operate under reduced collateral requirements, allowing early participants to test the system and provide feedback. ELA rewards will be distributed during this period, with Bitcoin fee mechanics rolling out in future updates. Arbiters can use a dedicated dashboard to monitor tasks, verify or challenge contract events, and maintain uptime for time-based services. By participating early, users gain a head start in shaping a decentralized infrastructure layer that could soon power Bitcoin’s role in global DeFi.
A New Financial Blueprint Built on Bitcoin’s Security
“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 Mitchell. The long-term vision is to build a global web of finance that remains anchored to Bitcoin’s immutability while interacting seamlessly with EVM-based smart contracts. The Arbiter Network provides the tools needed to coordinate complex financial interactions—loan issuance, expiration tracking, liquidation disputes—without relying on centralized oversight. It’s a model that places trust in mathematics and distributed consensus rather than custodians or third parties.
Positioning Bitcoin at the Core of Decentralized Finance
BeL2 is more than an innovation—it’s a reframing of what Bitcoin can do. By making Bitcoin compatible with programmable smart contracts through cryptographic verification, it opens the door to countless applications while retaining the core ethos of decentralization. From lending and synthetic assets to dynamic derivatives and settlement layers, BeL2 introduces a secure path for Bitcoin holders to participate in DeFi without sacrificing their sovereignty. Arbiter nodes act as neutral validators, coordinating disputes and maintaining protocol reliability—bringing much-needed structure to the evolving world of BTCFi.
Conclusion: Building the Future of BTCFi, One Proof at a Time
Elastos’ Arbiter Network marks a foundational shift in decentralized finance. It connects the security and credibility of Bitcoin with the flexibility of smart contracts, building a future where users can earn, lend, and transact without moving assets off-chain. With its beta release now underway, the Arbiter Network invites developers, investors, and early users to participate in shaping the next chapter of trustless, Bitcoin-backed finance. As the world’s financial systems continue to decentralize, BeL2 stands as one of the first truly secure and scalable bridges between Bitcoin’s past and DeFi’s future.
