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Elastos Looks to Capture BTC Staking Demand With Bitcoin Layer 2 Offering
The platform is developing Bitcoin tools as the applications built on the network catch favor with investors.
Updated Apr 9, 2024, 11:08 p.m. Published Dec 19, 2023, 1:00 p.m.
Blockchain network Elastos is introducing BeL2, a Bitcoin layer-2 network, in a move that could capture billions of dollars in bitcoin [BTC] volumes from staking tools offered on the new platform.
BeL2 will allow more sophisticated bitcoin transactions than the base Bitcoin blockchain, including smart contracts and irreversible digital agreements, Elastos developers told CoinDesk. The smart contracts can be defined, managed, tracked and modified wholly on Bitcoin without needing an intermediary.
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The network will also let users stake their bitcoin holdings directly on the service, paying out yields while users interact with applications built on BeL2. Transactional fees are expected to be very low, potentially even eliminated, compared with the $10 average for Bitcoin transactions as of Tuesday.
"The arrival of BeL2 means that Bitcoin is now 'smart,' highlighting the potential for Bitcoin holders to stake their assets directly and earn interest on their holdings," Sasha Mitchel, head of strategy at BeL2 said in a note to CoinDesk. "It's always been an anomaly that Bitcoin reserves remained effectively 'dormant' between transactions."
Bitcoin layer-2 projects have flourished this year, with tokens of projects such as increasing as much as 300%. Such networks share a ledger that allows users to store data outside the main Bitcoin blockchain, enabling developers to build apps on the platform, just as they can on Ethereum and Solana.
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