Greetings Elanauts! As we approach the close of 2024, we are thrilled to share progress and updates on Elastos’ BeL2 Arbiter Protocol—a key element of BeL2’s mission to provide a trustless, decentralised financial infrastructure for native Bitcoin (NB) DeFi. While development is ongoing, here’s an update on the anticipated features and the roadmap toward delivery.

Key Features of the Arbiter Protocol

1. Asset Versatility for Arbiter Registration: The upcoming protocol will support Elastos (ELA) and BPoS NFTs as acceptable assets for staking as margin. This focused asset support strengthens the connection to the Elastos ecosystem while incorporating BPoS NFTs to support additional mainchain staking and mainchain ELA rewards.
2. Governance for DApp Integration: DApps will need to register and receive approval to use the protocol. This process will either be overseen by a designated administrator or structured through a DAO protocol, ensuring fairness and collective decision-making. Further details regarding governance will be refined collaboratively with the community.
3. Transaction Management and Fees: Each DApp transaction using the protocol will designate an arbiter and incur a handling fee. The fee will depend on the arbiter’s pledged assets and the transaction duration. For instance, at a 10% annualised rate, a 6-month transaction requiring 10,000 ELA pledged would generate a handling fee of 500 ELA.
4. Future Incentive Mechanisms: At present, the protocol does not include a token issuance mechanism for arbiters. This element, part of the broader incentive system, will be evaluated during future development.

Development and Rollout Roadmap

1. Finalising Product Features (3–4 weeks remaining): The development team is focused on completing the functional components of the Arbiter Protocol.
2. Internal Testing and Refinements (~2 weeks): Comprehensive testing will follow, ensuring functionality and addressing any issues identified.
3. Alpha Release (Internal Testing & Feedback): A limited release will enable stakeholders to provide feedback on the protocol’s design and performance.
4. Beta Release (Community Testing & Feedback): The protocol will then be opened to the community for further testing and input to fine-tune its operation.

Looking Ahead

The Arbiter Protocol delivers the final piece of BeL2’s decentralised clearing service. By introducing execution through dispute resolution and time-based transaction handling, it completes the system’s foundation. This capability adds to the already established components of collateralisation, verification, and cross-chain communication, offering a fully operational framework for NB DeFi.

The Role of the Arbiter System in Decentralized Clearing

1. Collateralisation via Locking Scripts
   Bitcoin transactions are safeguarded by locking scripts, allowing users to secure assets like BTC, ELA, or NFTs within a trustless structure.
2. Verification through Zero-Knowledge Proofs (ZKP)
   Transaction validity is confirmed using ZKPs, ensuring data integrity and privacy without exposing sensitive details.
3. Cross-Chain Communication via ZKP
   The system passes ZKPs into EVM-compatible smart contracts, enabling Bitcoin to engage with external smart contract ecosystems without leaving its native network.
4. Execution and Dispute Resolution
   Arbiter nodes manage time-sensitive transactions and resolve disputes in a decentralised manner, eliminating reliance on centralised systems.

Next Steps: Expanding the Ecosystem

With Version 1 nearing completion, our focus will turn to refinement and ecosystem growth:

1. Reducing ZKP Generation and Verification Times
   Integrating recent optimisation of the time for ZKP processes into loan dApp to showcase improved transaction flow and user experience.
2. zkBTC Full Nodes on Mobile
   Enabling mobile devices to operate zkBTC full nodes will increase accessibility and decentralisation.
3. Launch of the NBW Stablecoin
   The Native Bitcoin World (NBW) stablecoin will be the first major DApp on BeL2. This BTC-backed stablecoin will provide new opportunities for payments and lending while upholding Bitcoin’s foundational principles.

Thank you for being part of this journey as we bring native Bitcoin DeFi closer to reality! Did you enjoy this article? Follow Infinity for the latest updates here!