What We Haven’t Been Up To
June 22nd, 2022

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.

So here’s our ask: get engaged. Put forward your ideas! Debate them on the Forum and elsewhere. Delegate or Vote. Promote your vision. Run for GSC. The best things about the members of the Elf Community are that they’re strong-minded, intentional, thoughtful, flexible, experimentational, and innovative. They can come up with things that we could never imagine. We’re thankful to them; we’re thankful to you. The direction of this protocol and how it's shaped going forward will be decided entirely by you all.

What’s Next for Us?

We’ve put a lot of thought into this. It’s possible that we could just dissolve as an entity, each of us going our separate ways. Candidly, we just can’t see ourselves doing that. We love what we’ve built, and are (somewhat) sad to “release it into the wild”, but there are two things that keep us from just breaking up the Company and saying goodbye.

First, even though we don’t control the Protocol, we—and others—can continue to do research. We don’t have anything to share right away, but there are plenty of non-Protocol “bolt-ons” that we’re looking into. Above all, we’re researchers; we’re nerds; we’re experimenters, thrilled with trial and (all-too-frequent) error. Many of those projects may turn into stand-alone applications that don’t require changes to the Protocol; others may require discussions and proposals, but since we’re largely staying outside of the Governance process, for now, those are going to have to wait. 

The other reason why we won’t just go our separate ways is pretty straightforward to us. We really like each other. We’re a great team, even when we disagree, and especially when we disagree. We’ve built an incredible group of individuals from all walks of life, and with incredible skills. We share a common ethos of respect, innovation, and learning from each other. We’re lucky to have each other and we love the people on our team. We’re not going anywhere. (In fact, we’re expanding and hiring, so consider our postings.)

So we’re going to be researching, developing, and creating a whole host of innovative products, especially around fixed and variable rates. We’re going to be putting together thought leadership pieces related to our research, governance issues, and other issues in the DeFi space more broadly. We’re going to continue our government outreach in support of responsible innovation, and leaning forward into helpful, useful regulation that will address risk and balance competing concerns.

We're taking the necessary steps toward letting the DAO cultivate a strong self-governed community led by some of the brightest contributors. We know that having us stand by the sidelines may seem like we’ve walked off the field. Rather, it’s that we want the Community to take its own leadership, and they can’t do that if we’re still playing some role as “Supra-governance” where people look to us for the answers. DeFi is going through several inflection points right now, and it’s a challenging time for participants, companies, researchers, investors, governments and other policymakers, and a whole host of other stakeholders. But we’re excited for the future and our new role. We hope you are too.

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