Imagine if Bitcoin could talk to other blockchains, make deals, and execute contracts without ever leaving the main network. That's Bel2. BeL2 provides a completely decentralized clearing network service for Native BTC DeFi.
A New Bretton Woods System
Since its inception in 2009, Bitcoin has grown to a market cap of over $1.3 trillion. Despite its initial limitations, emerging Bitcoin Layers like meta-protocols, sidechains, and layer 2 solutions are set to revolutionize decentralized finance (DeFi).
Interoperability across Bitcoin layers to unite innovations can unlock over $1 trillion in dormant value within the next 5-10 years, delivering a new Bitcoin-backed Bretton Woods monetary system.
Today’s Problem
Bitcoin layer interoperability depends on third-party custodians, creating trust and security issues. Wrapped Bitcoin (WBTC) requires trust in centralized institutions to bridge assets across layers, undermining decentralization. Trustless mechanisms are needed for true decentralization.
Native Bitcoin DeFi
Native Bitcoin DeFi refers to Bitcoin that remains on its main network while being collateralized for Layer 2 applications, such as exchanges, loans or stablecoin issuance. We believe all Bitcoin-related settlements must be settled on the Bitcoin mainnet for security reasons. Instead of transmitting assets across chains, messages should be sent where smart contracts on Turing-complete blockchains verify and execute complex tasks and logic. This is the decentralized clearing network BeL2 provides.
Staking
Non-custodial native Bitcoin staking scripts for decentralized wallets using mainnet security.
Verification
Zero Knowledge Proof generation for verifiable proofs on Bitcoin staking transactions.
Communication
Oracle to bridge proofs into Layer 2 smart contracts for native Bitcoin services.
Execution
Decentralized and collateralized Arbiter nodes for time-based execution and dispute resolution.
zkBTC Node and Arbiter network
Zero-Knowledge Proofs, rather than assets, are transmitted across chains, allowing collateralized Bitcoin to participate in smart contracts without leaving the main network. Inspired by ZeroSync, BeL2 continues this innovation by developing a light client ZKP verification solution for Bitcoin, including Taproot, BRC20, and Runes.
BeL2 allows stakeholders to run zkBTC full nodes on mobile phones, eliminating the need for third-party confirmation and forming a decentralized native Bitcoin DeFi settlement network. Upgraded zkBTC nodes can become arbitrator nodes with collateral, earning BTC fees for overseeing loans and resolving transactions. To prevent collusion, challengers can submit proof of arbiter misconduct for punishment and compensation.
StarBTC Loan Demo MVP
The first and only native Bitcoin lending protocol, keeping BTC on the main network. We have created a fully decentralized and collateralized lending system on the BTC mainnet. Your BTC acts as collateral, remaining non-custodial and non-liquidatable before maturity. Mortgage BTC, borrow USDC. Borrowers repay and lenders get back USDC and interest; or borrowers default and lenders get more BTC.
BTC Locking
Users lock their Bitcoin via a custom transaction script, making it accessible only under predefined conditions within an Ethereum smart contract.
Smart Contract
Governed by a smart contract on the EVM, the loan’s terms are laid out, including interest rates and the conditions for collateral access or liquidation.
Arbiter Function
Arbiters act as bridges between Bitcoin and EVM chains, verifying transaction proofs to ensure all conditions are met for collateral release.
Partner Network
From Bitcoin merged-mined security and layer 2 execution environments to abstraction toolsets and leading platforms, BeL2 is partnered with industry leaders to deliver native Bitcoin DeFi.
Media
Executive
BeL2 is a Layer 2 solution for Bitcoin that enhances its capabilities by enabling smart contracts, DeFi applications, and interoperability with other blockchains while maintaining Bitcoin’s security and integrity.
BeL2 uses zero-knowledge proofs and the BTC Oracle to securely bridge Bitcoin with Ethereum-compatible blockchains, allowing smart contracts to interact with Bitcoin transactions without moving BTC off its main network.
BTC Loan allows users to borrow stablecoins like USDT against their Bitcoin collateral, with fixed interest rates and protection against forced liquidations. It ensures privacy and security through zero-knowledge proofs and smart contract automation.
We have created a fully decentralized collateralized lending system on the BTC mainnet that does not rely on WBTC or any cross-chain bridges.
Suppose Alice collateralizes BTC and borrows USDC from Bob. The BTC is locked in a BTC collateral script. If Alice fails to repay the USDC by the deadline, Bob can retrieve the BTC from the script. If Alice repays on time, Bob must cooperate with Alice to jointly sign off on unlocking the collateralized BTC.
The critical question is: what happens if Bob refuses to cooperate? We utilize the arbiter network provided by BEL2 to act as an intermediary between Alice and Bob. Alice can initiate arbitration, and the arbiter can co-sign with Alice to unlock the BTC (Alice and Bob choose the arbiter when they initially create the transaction contract).
A new issue arises: what if Alice and the arbiter collude maliciously? Based on the BTC transaction proof provided by BEL2, the collateralized BTC can be monitored. If it is misappropriated, Bob can initiate a challenge by submitting proof of the arbiter’s misconduct to the arbiter contract. This will punish the arbiter, and the penalty will compensate Bob.
With this oversight mechanism, any malicious actions will result in greater losses, making cooperation the best outcome for all parties. In most cases, Alice and Bob can complete the lending transaction smoothly without the need for arbiter intervention.
This system utilizes BEL2’s arbitrator network and zero-knowledge proofs for BTC transactions. The proof circuit is implemented using StarkWare’s Cairo1.
Developers can access SDKs, tools, and detailed documentation to build applications on BeL2. Join our community for support and collaboration.
