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Arbitrator Network

The Arbitrator Network is the communication backbone of the BeL2 system that helps ensure the system's security and efficiency.

Main purpose:​

To facilitate the transmission of data and proofs between the Bitcoin network and other blockchains.

Key features:​

  1. Decentralized network of nodes that anyone can join.
  2. Ensures timely and reliable transmission of transaction proofs.
  3. Adds an extra layer of security and reliability to the system.
  4. Uses a consensus mechanism to validate cross-chain operations
  5. Nodes must stake assets (BTC, restaked BTC, ETH LRT, or ELA) to participate

How it works:​

  1. Arbitrators monitor Bitcoin transactions and BeL2 operations
  2. They participate in validating cross-chain transactions and proofs
  3. Arbitrators reach consensus on the validity of operations
  4. They help facilitate time-based execution of smart contracts involving Bitcoin

User-Requested Arbitrations:​

  • Users can request arbitrations in specific scenarios, such as when other parties fail to confirm transactions promptly.
  • For example, in a loan application, if the lender doesn’t unlock the BTC after the borrower’s repayment, the borrower can initiate an arbitration process.
  • Arbiters then step in to resolve disputes and unlock the BTC, ensuring fairness and adherence to the agreed-upon terms.

Here is a diagram showing a loan repayment flow with user-requested arbitration.

By leveraging these core technologies and components, BeL2 creates a robust, secure, and efficient system for integrating Bitcoin with the world of smart contracts and decentralized applications. This opens up a wide range of possibilities for using Bitcoin in complex financial applications while maintaining its fundamental security and decentralization.