Elastos is thrilled to announce the launch of the Arbiter Network, a pivotal component of our innovative Bitcoin-Elastos Layer 2 (BeL2) protocol. The BeL2 protocol connects Bitcoin (BTC) and EVM-compatible networks to create a secure, decentralized lending environment. To encourage adoption and usage, BeL2 is launching a rewards program on Friday the 8th of January using ELA tokens for participants in BeL2s demo dApp lending platform. To see a PDF of the full in-depth details of the full program and system provided by NBW, you can read V2 ELA Rewards here. Want to set up an Arbiter node? See here.
Core Program Parameters
Duration and Pool
- Program Length: 30 days from launch
- Total Reward Pool: 12,000 ELA
- Daily Maximum Distribution: 400 ELA
- Status: Program ends when either the 30-day period concludes or the reward pool is depleted
Participants can access 24-hour loans with a 24-hour grace period, borrowing up to 100 USDT against a collateral cap of 0.002 BTC. The platform offers 0% APY (promotional rate) with an initial Loan-to-Value (LTV) of 80% and liquidation at 85%. Borrowers and lenders incur no arbitrator fees during the promotion but pay cross-chain gas fees.
Borrowers who take out loans of at least 50 USDT and successfully repay within the terms receive 3 ELA per transaction, while lenders earn 1 ELA. Rewards are limited to the first 100 qualifying daily transactions and distributed within 72 hours.
To ensure safety, loans are automatically liquidated when the LTV threshold of 85% is reached. In such cases, lenders receive BTC collateral at 85% of its market value. If loans are unpaid, arbitrators confiscate the borrower’s BTC to cover the loan amount, a 5% penalty for lenders, and a 1% arbitrator fee, with any remaining collateral returned to the borrower. The Loan-to-Value ratio compares the loan amount to the collateral value and adjusts dynamically based on BTC price fluctuations.
- Safe Zone: LTV < 80%
- Warning Zone: 80% ≤ LTV < 85%
- Liquidation Zone: LTV ≥ 85%
For example, a borrower with 0.001 BTC collateral ($100 value) and an 80 USDT loan would face liquidation if BTC’s price drops to $94,117, pushing the LTV to 85%.
Tips for Borrowers
- Maintain an LTV buffer below 80%.
- Monitor BTC price fluctuations.
- Take preventive actions like adding collateral or repaying partially if LTV nears critical levels.
Reminder: The BeL2 system automatically monitors these thresholds and executes liquidations when necessary, but it’s crucial for borrowers to actively manage their positions to avoid reaching the liquidation threshold. Further details about the program launch will be released on Friday 10th January, highlighting the integration of our dApp lending platform with Arbiter nodes—a significant milestone in Bitcoin smart contract service innovation! Follow Infinity for the latest updates here!
