Today our friends at Aztec Network have launched an integration of Element Finance’s fixed rates purchase and redemption transactions, with the zk.money privacy dApp, through Aztec Connect bridges. The sight of these DeFi lego pieces coming together to bring the virtues of low-cost, private transactions for users of fixed rates is truly beautiful to behold.
You can check out our previous blog post for more context on what this integration means for the Element Finance Protocol and its users.
Essentially, this integration tackles two of the challenges that many users face when using Element’s fixed rates on Ethereum Mainnet:
The worlds of NFTs and DeFi have generally stayed separate, experiencing only minimal cross-pollination. At Element, we believe there is fertile ground at their intersection, ripe with fresh and exciting ideas waiting to be unearthed.
NFTs are an artistic medium of visual and creative expression that we wanted to bring to users of DeFi protocols. Users naturally craft experiences and design a vibrant story in their protocol and community interactions, well beyond their portfolio balance.
The birth of the Elfiverse was born from the desire to weave Element community members into a world of visual storytelling that increases ownership and belonging in a rich DeFi universe.
We’re heads down and building through the market’s current uncertainty. We’ve situated our path forward. A few themes in what we’re doing:
Our current research and implementation plan is a 9-month timeline. But no matter what, we’re not racing against the clock. Our sense of urgency is the importance of building secure, exceptional products and continuing research in DeFi.
As we’ve pointed out previously, Element Finance decentralized its protocol almost three months ago, following the successful release of its governance token, and various steps in furtherance of decentralization. Control of the Protocol is now in the hands of the community. And as noted HERE, we are intentionally stepping back for a time even further to make sure that we’re not fully participating in governance. It’s important to us, as the former owners of the Protocol, to ensure that the Community itself, and not its legacy stewards, have the direction, vision, and authority over the Protocol itself.
It has now been almost three months since we launched Element DAO, the governance system, governance token ELFI, and decentralization has picked up steam. Since the launch, the Element community has put forward a number of proposals, and individuals campaigned for GSC representative positions; there have been many topics and discussions posted in the governance forum; the Element Protocol is fully in the hands of the community.
What does that mean for Element Finance, Inc.? It means that we couldn’t control the Protocol if we tried. The Protocol is fully open sourced: it can be forked by anyone who wants to. Voting and decisions by governance can change the trajectory of the Protocol, but our Company cannot.
This was by design. We know that for the Element Protocol to grow and reach its full potential, we need to let go of it. (Believe us, this doesn’t make it an easy decision.) Others can, and should, build on top of it. Others can, and should, decide what the Protocol should look like, how it should operate, and what direction it should take.
The Community will have its own leaders and people who have strong thoughts—including some thoughts that we might not even agree with. And while we understand that folks may want to ask us for our views, we’re going to be very constrained—even more than what’s necessary—in how, or whether, we’ll respond. That’s important to us.
We are happy to introduce the Governance Steering Council (GSC) dashboard.
The GSC is a group of delegates, each of whom has reached a pre-established threshold of delegated voting power, giving them additional governance powers within the Element governance system and, as a result, additional responsibilities.
Since the launch of the Element DAO, fourteen community members have become eligible to join the GSC (one of which joined before the dashboard was even launched), and many more have submitted applications, as you can see here. The members of the GSC are elected on a continuous, rolling basis and in real-time, so new members might join in the future if the current ones go below 0.9% of the total circulating votes delegated to them (currently 110k votes). In a way, this acts as if the GSC members are elected in real-time by the governance community, reflecting the most current state of political dynamics within the DAO.
As previously announced, Element Finance has begun the process of decentralization. We have relinquished control over the Element Protocol. And, through the launch of governance generally to the retroactive airdrop to a series of other steps, we are committed to ensuring that the community will conduct the overall governance, vision, and guide the direction of the Protocol.
To that end, we’re releasing into the public domain a collection of research and code that will be compatible with the Protocol (including the governance protocol). Members of the community (or others) can use, repurpose, fork, or take whatever steps they choose regarding this code. Similarly, because much of it is composable with other protocols, it is possible that some or all of this code can be deployed (with little to no modification) for those projects.
Open Source Code:
As of March 31, Element DAO is fully decentralized and community governed. And as all governance launches go, it begins with chaos.
We have a long path forward before the DAO can reach a healthy political dynamic and operational self-sustainability and expect that Element governance processes will evolve and continue to expand and adapt as necessary. At the outset, we propose the following framework for decision-making. The Element community may vote on changes to these processes to evolve the governance framework over time.
The Element Governance Proposal Framework enables all community members to participate in governance by giving them a standardized way of interacting and operating the DAO.
In a truly decentralized organization, everyone should be able to participate and propose improvements. This framework provides the necessary tools and processes to kickstart the operations of the DAO and help push it forward.
At Element Finance we believe that delivering on the true promise of decentralized finance doesn’t stop at the protocol. It requires a broad, decentralized community of thoughtful stewards as well. We’ve been working on the details of our governance launch for the last year, and the time to launch it is now. Our approach melds the best of both worlds: the familiar “everybody votes” system of direct democracy most DAOs currently use, as well as representative democracy through vote delegation and a Governance Steering Council. A flexible system of voting vaults ties it all together, allowing different voting criteria to back various types of voting power. This is built on the back of the Council Protocol, a new open source governance protocol that Element Finance built from the ground up for anyone to use.
As part of the distribution, we’re proud of a few innovations we pursued, which we cover in the following sections.
We’ve chosen to distribute voting power not just to Element users, but also to Ethereum Core developers. We believe it is important to give a say in the direction of DeFi to those who make it all possible. We’ve also chosen to give voting power to core L2 developers, DeFi projects on which Element was built, and other DeFi ecosystem projects. We’ve analyzed a number of GitHub repos and the contributors who committed code to situate the voting allocation. We’ve also deployed a ZK claim process so these users can claim without being doxxed. We dive into more specifics below.
Element call for delegates & members of the GSC is now live.
Click here to nominate yourself!
At Element, we’ve been on a journey of exploration and discovery in the world of crypto for what seems like ages (almost a year since planting the seed). An open and self-sustaining protocol can only be achieved without any single point of failure. Element Finance is the core team of builders that founded this new land. But what we’re building is much greater than ourselves. The path to financial freedom and democratization requires building a wider community to govern and guide the protocol. Today we at Element Finance take the first step forward.
To tackle the arduous task of governing the Element protocol, we’ll need the trustiest of allies and stewards at our side (even Elrond didn’t go alone). That’s why today we’re opening The Way for aspiring adventurers to become members of the Governance Steering Council (GSC).