Staking cryptocurrency assets typically means locking them away for months, leaving users unable to take advantage of new opportunities—a common frustration in the crypto space. But what if the Elastos ecosystem allowed users to unlock staked Mainchain ELA without unstaking? With Elastos BPoS NFTs, users can convert their staked assets and APY rewards into NFT receipts on the Elastos Sidechain’s (ESC) open market.
The Bonded Proof of Stake (BPoS) NFT system offers a novel solution by combining Bitcoin-backed ELA staking security, ELA APY rewards, and tokenized liquidity through ERC-721 standard NFTs. This system allows users to stake ELA with validators and mint BPoS NFTs, representing their staked assets and accruing Mainchain rewards. These NFTs can be traded, collateralized, or transferred using Smart Contracts. Let’s explore how BPoS NFTs work, the Elastos consensus model, and the essential role these NFTs will play in the upcoming BeL2 Arbiter network.
Understanding Elastos’ Dual Consensus Model
Elastos operates using a multi-layered consensus called Elastic Consensus, combining Auxiliary Proof of Work (AuxPoW) with Bonded Proof of Stake (BPoS) to secure the network and provide utility.
1. Auxiliary Proof of Work (AuxPoW): Bitcoin-Backed Security
- Bitcoin’s Security: AuxPoW leverages Bitcoin’s mining infrastructure, allowing Bitcoin miners to secure both Bitcoin and Elastos simultaneously without extra energy costs.
- 293.69 EH/s of Bitcoin’s total 580.74 EH/s hash rate reinforces Elastos, giving it nearly 50% of Bitcoin’s security.
- Benefits of AuxPoW:
- Energy Efficiency: Elastos inherits Bitcoin’s security without additional energy consumption.
- Network-Wide Trust: This shared security protects the Elastos Mainchain and sidechains, making the entire ecosystem highly reliable.
2. Bonded Proof of Stake (BPoS): Securing the Network with Validators
- Long-Term Staking: Users lock ELA on the Mainchain to secure the network and validate transactions.
- Incentivizing Participation: Users earn 2-3% APR, with higher rewards for longer lock periods. Validators must hold 80,000 staking rights to participate in block validation, sharing rewards with stakers.
This hybrid consensus model ensures that Elastos is anchored in Bitcoin’s security, while BPoS validators provide a second layer of decentralized governance and stability.
How Elastos BPoS NFTs Unlock the Value of Staked ELA
Traditional staking locks assets, limiting liquidity. BPoS NFTs solve this problem for Elastos and by converting its mainchain voting rights into ERC-721 standard NFTs that represent the ownership to claim the underlying staked ELA and its accumulating rewards.
How BPoS NFTs Work
- Staking and Minting:
- Users stake ELA tokens on the Mainchain using the Essentials Wallet.
- Once staked, they can mint BPoS NFTs on the Elastos Smart Chain (ESC).
- The NFT represents both the staked ELA and the accumulating APY rewards.
- Trading and Transfer:
- BPoS NFTs can be freely traded or transferred on the Elastos Smart Chain.
- This allows users to unlock liquidity without ending their staking position or interrupting rewards.
- Burning and Claiming Rewards:
- NFT holders can burn NFTs anytime to claim APY rewards.
- The staked ELA remains locked until the lock period ends, at which point it can be withdrawn by the original staker.
BeL2 Arbiter Network: Unlocking New Financial Applications
In the upcoming BeL2 arbiter network, BPoS NFTs will act as collateral for BTC-based loans, stablecoin issuance, and dispute resolution services. Arbiter nodes using these NFTs as collateral will earn BTC-based and dApp rewards, in addition to Mainchain ELA rewards.
This decentralized financial infrastructure will allow users to participate in Bitcoin-native dApps without moving BTC off the mainnet, creating an easy integration between Bitcoin security and BeL2 DeFi applications, such as the upcoming Harvard student-led teams “New Bretton Woods (NBW)” project, incubated by the Harvard Innovation Labs.
Collateralization in the BeL2 Arbiter Network
- Arbiter Entry: Users can stake ELA BPoS NFTs as collateral to participate as nodes in the BeL2 network.
- Earn BTC and dApp Rewards: BPoS NFT arbiter nodes earn percentage-based BTC and dApp rewards, alongside Mainchain ELA staking rewards, for supporting time-based transactions and dispute resolution services that reflect the value of their collateral.
- Decentralized Financial Services: The BeL2 arbiter network supports Native BTC services, ensuring decentralized loans are completed, maintaining stablecoin pegs, liquidating assets based on market conditions, and providing dispute resolution services, offering a secure, decentralized alternative to traditional financial systems.
So What are the Key Advantages of Elastos BPoS NFTs?
- Flexible Liquidity: Trade or transfer staked assets and their rewards as NFT receipts without waiting for the lock period to end.
- Bitcoin-Backed Security: 293.69 EH/s of Bitcoin’s hash rate secures the Elastos Mainchain, providing trust and reliability.
- New Financial Tools: Use BPoS NFTs as collateral for loans and arbitration services in the upcoming BeL2 network.
- Simple Wallet Management: Manage NFTs through the non-custodial Essentials Wallet, ensuring full control over staked assets.
Conclusion
The Elastos BPoS NFT system offers a groundbreaking solution by combining Bitcoin’s security with NFT liquidity. Users can mint, trade, or burn NFTs anytime, claiming APY rewards without interrupting their staking period. The ability to unlock staked ELA after the lock period ensures long-term rewards while maintaining flexibility.
With the upcoming BeL2 Arbiter Network, BPoS NFTs will serve as collateral for BTC-based loans and dispute resolution services, creating new earning opportunities. This innovative design reflects Elastos’ commitment to decentralization, offering secure and scalable financial tools for the future of blockchain-based finance.
With ELA’s fixed supply of 28.22 million, Bitcoin merge-mining security, and a 4-year halving cycle, participants benefit from both scarcity and sustainability. The Elastos BPoS NFT system sets a new standard for DeFi innovation by offering liquidity, security, and long-term value for users.
Want to mint a BPoS NFT? Tomorrow, we will release a step-by-step guide on how to mint your BPoS NFT. Did you enjoy this article? Follow Infinity for the latest updates here!