Cambridge, MA — Tuesday November 26th 2024. As Bitcoin soars past its all-time highs, capturing global attention and sparking renewed interest in decentralized finance, a team of Harvard students and alumni called the New Bretton Woods (NBW) Labs has released a whitepaper detailing the development of a Bitcoin-backed stablecoin using the Bitcoin Elastos Layer 2 (BeL2) protocol.

Developed by Elastos, a SmartWeb ecosystem provider, BeL2 is presented in the NBW whitepaper as central to a Bitcoin-powered SmartWeb, which will redefine global finance, echoing the impact of the original Bretton Woods Agreement of 1944. Leveraging the resources available through a Harvard Innovation Labs student membership, the NBW whitepaper explains how NBW aims to replace inflation-prone fiat currencies with a stable, Bitcoin-backed currency and provides accessible, transparent, and programmable financial tools for everyone.

At the core of this project is the Native Bitcoin Stablecoin (NBS), a Bitcoin-collateralized asset pegged 1:1 to the U.S. dollar. This stablecoin allows Bitcoin holders to collateralize and unlock stablecoin liquidity without selling their BTC or entrusting it to a third-party custodian, preserving wealth and providing a hedge against inflation. The NBW Bitcoin-backed stablecoin on Bitcoin-Elastos Layer 2 (BeL2) aims to provide global stability and accessibility by creating an open financial platform available to anyone with internet access, granting individuals financial sovereignty in multiple ways.

“We believe that a Bitcoin-backed stablecoin is not only possible but necessary,” said Jacob Li, Head of Operations at NBW. “By using Bitcoin as collateral, we can offer a stable and secure financial instrument that empowers users without compromising the fundamental principles of decentralization.”

Built on the Bitcoin-Elastos Layer 2 (BeL2) protocol, the system combines Bitcoin’s unparalleled security and decentralization with Elastos’ scalable and interoperable Bitcoin-backed SmartWeb innovation. Elastos’ BeL2 protocol enables Bitcoin to communicate with other EVM-compatible blockchains without wrapping or bridging assets or using third-party custodians. This technology enables non-custodial Bitcoin collateralization via mainnet locking scripts, verified with Zero-Knowledge Proofs for privacy. Oracles bridge proofs to EVM-compatible smart contracts for a service, while decentralized, collateralized Arbitrator nodes manage time-based operations and dispute resolution.

Advantages of NBW Approach

• Liquidity without selling BTC: Bitcoin holders can mint NBS using their BTC as collateral, accessing liquidity while retaining ownership. This approach is ideal for those looking to preserve long-term exposure to Bitcoin’s appreciation without selling.
• Hedge against inflation: NBS serves as an accessible, decentralized store of value, hedging against inflation without the need to convert to fiat currency.
• Access to Decentralized Finance (DeFi): Once minted, NBS can be utilized across DeFi platforms and smart contracts for lending, borrowing, rights trading, and liquidity provision.

The NBW system not only anchors its stablecoin on Bitcoin’s security but also supports Satoshi Nakamoto’s 2010 vision of merge-mining through Elastos’ technology. This consensus mechanism allows Bitcoin miners to simultaneously secure the Elastos network without extra computational effort. With 44.58% of Bitcoin’s global hashrate merge-mining Elastos—including major pools such as Antpool, ViaBTC, F2Pool, and Binance—it achieves exceptional security, making its cryptocurrency, ELA, one of the most secure Bitcoin derivative assets worldwide. ELA additionally serves as collateral for Arbitrator nodes, enabling them to earn BTC rewards by supporting BeL2 transactions, such as dispute resolution for loans, and by facilitating stablecoin operations like NBW, which help maintain the peg and manage liquidations.

“People are seeking more ways to utilize their Bitcoin,” said Sasha Mitchell, Head of Operations at Bitcoin Elastos Layer 2. “Unlocking its dormant value with a stablecoin through Elastos’ solutions opens new possibilities for users to engage with decentralized finance without compromising security.”

Use Case for Native Bitcoin Stablecoin

This symbiotic relationship with Bitcoin establishes a new decentralized finance (BTCFi) model, where Bitcoin’s trust and security power scalable tools like NBW stablecoins and loans. NBS’s stability and programmability enable its use as a medium of exchange for everyday transactions, expanding decentralized finance’s accessibility. Institutions and governments can leverage NBS as a reserve asset, liquidity management tool, or framework for their own stablecoin solutions, benefiting from its transparency, decentralization, and ability to strengthen financial resilience while supporting strategic reserves.

By combining Bitcoin’s strengths with decentralized finance, the NBW system aims to restore financial stability, promote economic inclusion, and unlock the multi-trillion-dollar value dormant in Bitcoin today. The Native Bitcoin Stablecoin is a stepping stone toward a fairer and more resilient financial future.

Access the Whitepaper: https://www.nbwlabs.org/Whitepaper.pdf
Learn More: Visit www.nbwlabs.org
Contact Us: Email contact@nbwlabs.org

About New Bretton Woods (NBW)

The New Bretton Woods project is an independent initiative led by several Harvard students and alumni, currently being developed through a student membership of the Harvard Innovation Labs during the Fall 2024 semester. By merging Bitcoin’s security with Elastos’ innovative technology, NBW aims to redefine the global financial system and introduce a stablecoin designed for the digital age.

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