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 enable more advanced Bitcoin transactions than the basic Bitcoin blockchain, including smart contracts and irreversible digital agreements, Elastos developers told CoinDesk. The smart contracts can be defined, managed, tracked and customized entirely on Bitcoin without the need for an intermediary.
The network will also allow users to stake their bitcoin holdings directly on the service, with yields paid out as users interact with applications built on BeL2. Transaction fees are expected to be very low and possibly even eliminated, compared to 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 directly stake their assets and earn interest on their holdings,” Sasha Mitchel, head of strategy at BeL2, said in a note to CoinDesk. “It has always been an anomaly that Bitcoin reserves essentially remained ‘dormant’ between transactions.”
Bitcoin Layer-2 projects have blossomed this year, with tokens from projects like Stacks (STX) rising as much as 300%. Such networks share a ledger that allows users to store data outside the main Bitcoin blockchain, allowing developers to build apps on the platform just as they can on Ethereum and Solana.