We’ve met so many awesome builders at recent hackathons across the globe (Denver, Prague, NYC). We love your energy and want to remind you that hacking doesn’t have to be limited to a time and place. It can happen anywhere, anytime. 

Below are some ideas of interesting tracks to follow, but the only limit is your imagination.

Idea 1: Build Elfiverse NFTs that Evolve Using On-Chain Data

One of the most exciting things about NFTs that sets them apart from meatspace art is their ability to dynamically update and evolve before your eyes. This can reflect anything, from NFT-specific mechanics like an unlock or mutation provided through another NFT, to reflecting actions performed on-chain without any input from the user. For example, Metagame is building open-source technology to turn every on-chain transaction into a story 📔.

https://twitter.com/brennerspear/status/1552091025887281152

What dynamic traits would you like to see in an NFT that represents your identity within a DeFi protocol? It could track your usage of the protocol, contributions to the DAO, or anything you can think of… possibly even leading to your NFT levelling up.

Idea 2: Elfi Marketplace / Pools for Trading & Staking

Being able to easily trade between different members of a collection helps users find the perfect NFT for them. NFTx allows those indifferent between items in a collection to stake their NFTs and earn fees from transactions in a pool.

Fractional.art allows collective ownership of a single NFT, which can open up other interesting applications. SudoSwap just launched their NFT AMM that provides custom liquidity curves, while their OTC trade system is open and well-suited for 1-for-1 trades.

Which of these methods would allow Elfiverse residents to be their best Elf?

Idea 3: Use NFTs to Create Custom Voting Vaults

Part of the rich Elfiverse universe is the Council Protocol that allows for custom voting vaults. Voting Vaults let builders specify who gets to vote, what their voting power is, and for what purpose. 

• What would an Elf NFT voting vault look like? 

• Who should get to vote? NFT holders only? 

• Are certain NFT traits a requirement for voting?

• Can you add a multiplier to votes based on NFT traits?

• What kind of niche communities could this empower?

Maybe separate Elf bands could harness their creative power in certain areas, kind of like a working group? Take an Orca Pod for example, but make it Elfiverse. Governance nerds even get excited about alternative voting methods, but which type makes sense for governing the Element DAO?

Next Steps

With the recent launch of governance, the Element DAO is open and eager to hear your ideas! Pick something you’re passionate about, either from this list or propose your own, and join the Element community to build it. 

Join our Discord if you have any more questions, and post in #elfiverse. 

If you’re looking for a team member or someone to build or collaborate with you, comment on your idea, skillset and background on the forum.

Many lessons were learnt while building Elfiverse! This article will walk through a full technical breakdown of the process, including each individual component and the thinking behind these design choices.

Smart Contracts

NFTs have gone through a lot of changes over the past year with many variations of the ERC-721 standard, each varying in complexity and design goals. The goal with the Elfiverse architecture was to emulate other successful recent projects and allow the project to continue to evolve after the launch.

Throughout the ideation process, inspiration was taken from Crypto Coven and Azuki, which were notorious for their staged minting process and gas efficient contracts. While alluring at first, the special features weren't really needed for this project.

That means no batch minting, auctioning mechanisms or other components for launch. Including these features would just increase complexity, testing time, and gas costs.

NFT Contract

The elegant Solmate’s ERC-721 contract was used as the starting point.

This contract is a minimal implementation of the ERC-721 standard and hyper optimized for gas cost. Reducing gas cost was a primary goal of this project since it was a free mint, and removing this barrier would allow more community members to be involved within the DAO.

Thankfully, Solmate’s best practices did much of the heavy lifting, giving us a total mint cost under $10 at the time of minting.

Let’s dive into the gas optimizations of Solmate’s NFT contract!

Gas Optimizations

Let’s break this up into three sections: 

• Minimize On-Chain Storage with Events for Non-Critical Data

• Unchecked Arithmetic

• Short Circuit Evaluation

Minimize On-Chain Storage with Events for Non-Critical Data

A general best practice of smart contract development is to minimize the amount of data that needs to be stored on-chain. A contract only needs the minimum amount of data to perform internal logic and accounting, while some public methods can be computed off-chain. 

What does this mean?

Let’s take the example of wanting to know what token IDs a specific account owns. This is straightforward right? You just have to check the ownerOf mapping for each tokenId, but how would you figure out which token IDs to check?

A naive solution could be to create another data structure that maps an account to an array of tokenId’s they own. 

This method solves the problem but also uses a lot of on-chain storage. Another way around this is to reconstruct this data using transfer events. Each time an NFT is minted or transferred you get a new transfer event. You can search all events to and from a specific address and reconcile the current state of ownership. 

For example, think of going through N-transfer events and removing/adding IDs to a set whether the token was transferred in/out! Minimal changes to the data structure of Solmate’s base contract were made, thus the mint cost stayed really low.

Unchecked Arithmetic

Unchecked arithmetic is used widely in this smart contract. It allows modification of certain integer values without checking for overflows or underflows, which costs gas. 

In the case of this project, the mint ceiling was 10k, so it’s impossible for a uint256 value to overflow when doing simple incremental arithmetic. 

This should be a general practice for NFT projects as uint256’s ceiling is about the number of atoms in the universe. So unless you want every atom to have a spot on your whitelist, then using unchecked won’t cause any issues.

Proper judgment should be taken before implementing unchecked arithmetic in other use cases, as certain side effects and assumptions may break.

Short Circuit Evaluation

Another way to reduce gas is to simply reduce the runtime of your code. A first principle of programming is to use evaluation strategies such as short circuiting. Short circuiting means constructing boolean expressions in an optimal way such that an expression can be evaluated without computing the entire expression. 

For example, if you had a boolean expression that evaluates to true || false, you only need the value of the first truthy expression since this is an OR statement, the latter doesn’t need to be evaluated since the expression will always be true. 

This model can be used in Solidity as featured below:

In the safeMint function you can check if the recipient address is a contract by checking its code length. If the recipient address does not have any code, then it can be assumed the address is an EOA and can accept NFTs, the further expression does not even need to be evaluated.

Minter Contract

There was another contract, called the Minter contract, which verifies a Merkle proof and mints a new NFT on a signer's behalf. This logic was kept outside of the NFT contract to preserve the standard which has been audited.

Merkle trees can be used to optimize on-chain whitelisting paradigms. Instead of having to store every eligible address on-chain, you can just store the Merkle root. Minters then provide a merkle proof attesting they are included in the set of eligible addresses.

This setup yields major gas savings and preserves privacy until the time of mint! This article is a great read for more on how Merkle trees can be used for NFT whitelisting.

Fortunately, there are great packages for creating / verifying merkle trees. The popular merkletreejs was used to generate the Merkle tree and OpenZepplin’s MerkleProof library for proof verification.

Open source

• Token

• Minter

User Interface

Overview

The purpose of the interface was to inform users while letting them mint and view their Elfi NFT. These three goals are crucial for designing and building a great user experience. 

Following the footsteps of most web3 projects React was used, specifically the NextJS framework. NextJS lets developers hit the ground running, providing testing previews and content delivery when used with Vercel.

A couple of packages were relied on for building the app:

• useWeb3React: Popular hooks library for web3. This library allows you to connect and interact with different wallets providers.

• Styled-components: A CSS styling library that lets you write CSS as components. Any CSS library will work well here - Tailwind is used in other Element projects.

• React-query-type chain: A combination of React Query and Typechain that provides developers with react-query hooks that interface with typechain read and write operations. This allows you to have type safe interactions with contracts abis, all wrapped together in a stale-while-revalidate compliant hook!

Features

Minting

The minting UX flow was by far the most challenging to develop. During launch many users will rush to your site and there are many reasons why someone cannot mint.

This leads to a lot of edge cases, so it’s important to not only build out a linear minting flow, but one that accounts for all reasonable possibilities and leads the user as to why.

The Collection

There is a page called the Collection, which is a way to view your NFTs and get some high level information about the project. The process of getting the minting data was interesting because this data is not stored on-chain, but is derived from events. 

A mint transaction emits a transfer event in the smart contract. With this, you can fetch the event information from the provider and transform it to time series format. The fetching process can happen on the client side, but this will put unnecessary pressure on the provider. 

A better solution is to cache this minting data since it’s client agnostic and build it into our app’s bundle. How was this done? NextJS’s getStaticProps feature was leveraged to act as a caching layer. So instead of each client fetching the same data, this data was cached on the server which updates every 60 seconds. This not only reduces the load on the provider but speeds up the rendering process dramatically.

Formation Library

The Formation library lets you view each attribute or layer used to compose each Elfi in the collection. A custom component based on react-slick was used for the carousels!

Storage

On-chain storage is expensive, everyone knows this. It’s good practice for smart contracts to store as little data as possible for lower gas consumption. 

Data that is omitted from the contract but still needed for a successful transaction has to be stored somewhere. A low-effort option is to use a web2 database. A simple key/value database was used between an address and Merkle proof.

Traditional databases are cheap and great, but have the same pitfalls of any centralized resource. Decentralized storage solutions have improved substantially throughout the years, IPFS being a prime example. 

That’s why it was decided that all the metadata and images should be uploaded to IPFS and have the contract reference this data as the source of truth for the project. 

The IPFS content identifier is immutable, much like a smart contract, so the data behind every NFT in this collection cannot be forged or changed.

A pinning service, Pinata, was helpful to make sure there is always a provider and not rely on altruism for the project’s data availability needs.

Governance

Most NFT projects either have a primitive governance system or none at all. It’s common for projects to solely rely on a central authority. This is partially why most NFT projects fail, because the community has little control of the ownership of the project.

The Elfiverse is built different.

This project is owned by the Element DAO which uses the Council governance protocol. Council provides several great features, including the ability to define any use case to be assigned voting power.

Because of the natural flexibility built into the Council protocol, you can create a voting vault that gives NFTs voting power or even create a subDAO. 

The combination of governance and NFTs hasn’t been explored in depth yet. The possibilities are endless. You can read more about the Council protocol in this post.

Open Source

The Elfiverse is completely open source so check it out today!

• Contracts 

• Frontend

• Regeneration

• Merkle tree scripts

• NFT IPFS website

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:

Challenge 1: Transaction fees

In the current landscape, users who invest less than 1,000 DAI in fixed rates directly through Ethereum L1 would see most (if not all) of their fixed rate returns eaten up by gas fees. By bringing gas costs down, this integration allows deposits as low as 300 DAI to be profitable. This example considers a gas price of 20 gwei and ETH price at $1,200 USD, for making both transactions needed to purchase fixed rates and to redeem them at term maturity:

It’s important to recognize that due to current market conditions, gas prices and trading activity on Ethereum are low. Aztec’s scaling solution shines much more during times of higher activity (e.g. bull market) because transaction fees can be split among more users.

Also of note, in recent bull market cycles gas prices were closer to 100 gwei on average and ETH was priced over $2,500. Under those conditions, a user on Ethereum L1 would’ve had to invest at least 9,000 DAI to take a profitable fixed rate position. Thanks to a higher usage and trading volume during those times, Aztec’s integration could easily bring that profitability barrier down by 10x.

Challenge 2: Privacy

Aztec offers a privacy solution that utilizes zk-SNARKS, a technology that is quantum resistant and ensures maximum security for users.

What’s next on Element’s scaling journey?

Element’s first step into L2 scaling includes the fixed rate market for the DAI stablecoin. This already unlocks the power of fixed rates for many users, but this is only the beginning. We’re looking forward to other potential use cases and hope many in the community will help toward these and apply for grants to the DAO, such as:

• Selling Principal tokens: This would allow for other profitable strategies such as rates arbitraging according to market volatility. Lower gas fees would lower the barrier of profitability.

• Minting Principal and Yield tokens: This would unlock Yield Token Compounding (YTC), which lets users get multiplied exposure to variable rates. Lower gas fees make these positions much more efficient.

• Providing Liquidity: This would let users take on more passive strategies around their fixed rate asset holdings, such as explained here, which are currently difficult to make profitable due to gas fees.

• Supporting other assets: Our first exploration into L2 scaling only includes the DAI stablecoin markets, but more assets can easily be supported in the future.

So how do you use it? It’s easy! In summary:

1. Deposit DAI into https://zk.money -> get zkDAI (privacy-protected DAI)

2. Buy Element’s DAI fixed rates using zkDAI (currently 4% fixed APR)

3. Profit

You’ll find a much more detailed guide below, but don’t hesitate to reach out on our Discord server if you need any help!

ZK.Money + Element walkthrough

Anyone can enter a fixed rate position on Element Finance Protocol with low transaction costs and full privacy through zk.money by going through the following steps:

• Go to https://zk.money and click on Log In

Note: Aztec uses technology based on zk-SNARKS to maintain accurate balances of the users’ assets, while shielding them from prying eyes.

You can choose to have your transaction be sent through a Slow method or an Instant method:

• Slow: Your transaction will be included in the network’s next batch. This means you’ll have to wait until the next batch is sent (typically a couple hours), but it will also split the fee among all transactions included.

• Instant: You’ll pay for this batch of transactions to be sent instantly. As a bonus, other users’ transactions that were already in the batch will also be sent with yours!

You’ll now have to wait until the batch is sent for your shielded assets to be usable. If you chose the Instant option earlier, it should just take a few minutes. The Slow option should take a few hours.

You can now head on to zk.money’s Earn page, where you’ll find the UI to deposit your zkDAI in Element’s DAI term.

The next screen will also let you choose your transaction speed. The Batched fee will require a wait time but it’s the option with the lowest cost and maximum profitability.

Finally, you’ll get a confirmation screen which details the returns you’ll obtain at the end of the term, and you’ll be able to see the positions you’re currently entering or already entered.

That’s it! You’ll now be earning a fixed 4% APR on your DAI, while retaining low transaction costs and privacy over your positions. Once the term matures, you’ll be able to redeem your earnings through zk.money as well. Happy investing!

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.

Design Inspiration

In designing the Elfiverse, we wanted to bring to life the concept of being a living breathing Elf inhabiting the Element ecosystem (Element.fi or El.fi for short, get it?). The actions that users take in the Protocol had to be visualized in a way that could be compelling to the viewer, while also portraying the key elements of the Protocol’s story.

We gathered inspiration from movies, TV shows, and video games that describe the elements of elvish and medieval culture that we wanted to bring to life. Games such as Runescape gave us valuable examples of the different crafting and inventory systems that we wanted to explore. Games of Thrones was also a good point of inspiration in crafting the different environments to make them seem grand and lived in.

When crafting the scenes in 3D, visual composition plays an integral part. For example, to visualize how vast the Elfiverse is, different depth of field & atmospheric effects are used to craft large enough landscapes and environments to fully capture the expanse of the world. To really show the roughness & ferociousness of the Sea of Liquidity, we created a more violent ocean & darkened the sky with thunder clouds, depicting the treacherous journey to this new land.

Asset Creation

Throughout the creation of this project, we used a collection of assets that were created using pixelated components in Figma. An asset library of over 150 assets was created to be generated with a script to create unique random outputs, resulting in the Elfiverse collection of 10,000 ELF NFTs.

The asset library started with backgrounds, created with Cinema 4D, visualizing the regional ecosystem for environments that spanned across the Elfiverse. These rich environmental tapestries acted as a scaffold upon which a vibrant visual narrative could come to life, with fictional characters whose arcs closely mirrored our own.

Crafting the Backgrounds

As we started to craft the 3D environments, we curated virtual environments that validated the original story components. As an example, the characters of the Elfiverse were continuously traveling and venturing on a journey to build and find fulfilling goods to bring their ideas to fruition.

The first component was a set of portals that acted as intermediaries traveling between different parts of the world that were used to segment the different worlds based on the storyline. This included ‘Clear Skies’ that signaled peace and tranquility and ‘Blood Rivers’ that were shown to those with a future of battle or strife.

Building Out A Grid System

With the generation of the assets, we had to build out a grid layer system so that the assets being exported were carefully crafted in an order that showcased all the possible accessories and features the ELF NFT could have. Creating an array of elves that instituted a variety of appearances, personalities and a multitude of emotions was our priority.

The grid layer system was designed 32 pixels by 32 pixels and originated with different skin tones, weapons, clothes, hair, mouth, eyebrows, eyes, hats, eyewear, add-ons. Ranging from green body skin to red body skin, each body asset was exported as the first layer from the original drawLayer function in our regeneration script.

Designing the classes and accessories

As the ELF character’s journey and environments were being refined we aimed to define a class of elves that mirrored our community and our team. The five different foundational classes crafted were Adventurer, Warrior, Ranger, Cleric, and Mage. These classes were created by the accessories that defined them. These accessories were created in Photoshop and then added to our square layer grid.

The Generation

We built on top of an open source NFT generation script from HashLips, which gives you all you need to launch your own generative NFT project.

Of course, we added some Elf-specific twists:

• Separate randomness calculation from asset creation, to allow for testing

• Fine-grained assets and descriptions are stored in a csv for easy editing

• Debugging code to identify clashing color combinations

• Test statistical randomness of outcomes

• A meta-property defined by the NFT’s assets (your Elf’s class)

This enabled us to do quality control on specific outcomes, like generating 100 NFTs all with red background and red hair: does it look good? We decided to keep most of these in, including eyebrows that are a different color from your hair (that Elf used dye from dank strains).

We also built this light-weight spreadsheet to inspect the details of your Elf (this repo updates it, forked from @DarenMatsuoka). It lists each asset that comprises your NFT, including their description (not shown on other sites), which places your Elf uniquely in the lore of the Elfiverse. Rarity score uses a very standard calculation per asset, then added up for your NFT.

What’s Next

More recently we’ve open sourced our ELFI contracts that allow community members to build on top of our existing NFT infrastructure. We’re excited to see what opening up to the Elfiverse for potential collaborations and contributions means for the project.

It's time for the Element community to decide what to build on top of the existing NFT infrastructure. This is an exciting opportunity for designers, developers, and creatives to discuss how to expand the Elfiverse ecosystem. The possibilities are endless.

In the coming weeks, we will be rolling out more content to cover the different aspects of the Elfiverse. This will include:

• A Technical Deep Dive & Architecture Overview of the Elfiverse NFT Contracts

• An Open Source Elfiverse & What It Means as a Builder or Designer. Considerations around the future of Elfiverse & Element DAO, and ideas to explore.

• Transfer of the remaining Elfiverse ELF NFTs to the Element DAO Treasury

We’re excited about the future of the Elfiverse and want to hear from you! Join the #community discord and the Elfiverse forum channel and get involved in the discussion.

1. We are focused on helping the fixed rate ecosystem accomplish (or reach) product market fit

2. We’d like to help propagate fixed rate instruments as a core part, generally, of the DeFi ecosystem

3. We’d like to help support projects built on top of the current protocol and ecosystem

4. We’re research-focused and realize it is up to the DAO to choose the direction of the protocol, particularly upgrades to the existing protocol (See "What We Haven't Been Up To")

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.

So to reiterate what we said there, we strongly encourage the individuals in the community to engage in governance. Vote. Debate. Participate. Propose, disagree, revise, run for governance positions or promulgate proposals, and help choose the direction of the next steps of the Protocol.

What we’ve outlined in “Bolt-on Features” (Part One) below will not require protocol changes, and it does not implicate decentralization. In fact, it doesn’t require structural change or upgrades to the Protocol at all. And other companies and individuals can (and should!) do exactly what we’re doing — building on features that make use of the Protocol. Like other developers can build, we’re trying to research and build applications and features on top of the Element Protocol.

Let’s dive in on the current endeavors with a brief explanation of each.

Part One: Bolt-On Features

The following encompasses features or research which we are pursuing that will be built on top of the protocol.

V2 UI/Product Revamp:

In order to showcase the features described in this post, it is important to have a UI or product that demonstrates how it is put to use. We’re working on an entire revamp/recreation of app.element.fi that takes into account the protocol features below.

Note also that others can just as easily build their own interfaces; that doesn’t require us; it doesn’t require governance. This is the same as it’s always been.

Automatic Rollovers:

Allows for LP’ers to perpetually rollover and passively play a part in the ecosystem. LP’ers can configure to rollover automatically or for a certain time span, allowing for liquidity to passively move between terms. It accomplishes this via a contract that migrates liquidity between terms.

Umbrella Terms:

With Automatic rollovers, umbrella terms can be unlocked. An umbrella term is a wrapping term comprised of children terms. For example, a 2-year umbrella term on USDC can be comprised of 4 automatic rollovers on 6-month terms. The beauty is the LP’er gets both the yield position APY, the LP trading APY on the child terms, and also on the parent/umbrella terms. Longer terms introduce new use cases, attract different users, give certainty for longer periods of time, and make it easy to lock liquidity in the protocol for a longer period of time.

Optimistic Rewards:

This feature — also built on top of, not within, the Protocol — enables new yield sources. The optimistic rewards framework, described here, follows in the footsteps of optimistic rollups. Complex transactions or calculations can be run on rewards mechanisms, and the DAO acts as the finality layer with a 1 week challenge period. Long story short, new yield sources can be introduced and those yield source’s additional incentives (such as COMP emissions) can be distributed directly to participant’s wallets and does not require action from the Element protocol, such as selling these emissions. It is up to the user. Based on the economics of these systems, the principal token APR will take into account the emissions, and users who lock in a fixed rate get this without exposure to a new token such as COMP.

More Yield Sources:

Lately, yields in DeFi have been decreasing. However, there are still yield positions maintaining a reasonable level. Optimistic rewards situate the protocol to be able to introduce new yield sources easily, without the complexity of having to sell emissions from those positions. This may reduce complexity significantly by introducing new yield positions.

State Machine, Batching Transactions:

Currently, the app.element.fi product requires 5 transactions just to mint and LP on a position. The state machine breaks each action that is possible within the Element protocol into distinct opcodes and acts as a primitive interpreter. The frontend can string these opcodes together and batch all the transactions dynamically, turning the 5 transactions into 1. A proxy contract isn’t needed with the additional complexity of separate audits for each contract. This work builds on top of Weiroll and is currently going through a formal verification process. This can allow frontend products built on the protocol to be significantly more user friendly.

New SDK:

In order to encourage and drive more integrations into the core protocol, a strong SDK with supporting documentation is really important. The work on the SDK will implement the future looking pieces described in this post.

L2 and L1 Implementations:

Currently, the first L2 implementation from Aztec is being released. It not only brings scalability to the protocol but also privacy. It allows for batching on locking in a fixed rate, or even selling principal tokens.

In the long term, it is important users can lock in a fixed rate or multiply their exposure to variable rates without having to pay high gas fees. Currently, users need to deposit larger amounts in the protocol to compensate for the gas fees spent. With lower gas fees, there are other potential benefits such as better arbitrage activity, bot participation and wrapper products.

Compound & AAVE fixed rate borrowing adaptor:

Compound and AAVE can be transformed into a stable borrowing product, similar to a fixed rate borrow, by wrapping Element on top of the lending position. When taking out a borrow position on Compound, a user can hedge by purchasing yield tokens on the lending side. If the borrow rate increases, the yield tokens will also increase in the yield they collect.

We’ll release more research soon, but if this is counteracted with principal tokens as collateral on these same protocols or on protocols like Maker, it turns the fixed rate market into the intermediate liquidity source between these protocols. The potential impact is astounding, although it will clearly involve some more research. A preview of this concept can be found in this tweet thread:

https://twitter.com/wjvill/status/1527680960866705408

Unlike current fixed rate lending markets, the Element protocol powered fixed rates are additive to compound/aave and don’t require any changes to loans on those platforms.

V2 Incentives and Emissions, a better CRV model:

veCRV dynamics recently became the popular choice in the market. It definitely leveled up the incentive and emissions discussions, however, we have research on a new primitive we’ll be releasing soon. We consider it to be a significant improvement on the CRV model and serves as a product for other DAOs in the space immensely. It’s also something that doesn’t affect the Protocol itself. I know we’re being general here, so please just stay tuned. However, this in tandem with something as described in this thread, https://twitter.com/wjvill/status/1527680960866705408, can introduce better sustainability for a DAO’s value.

Part Two: Research on Iterations

Next-Gen AMM:

This is the only piece in this list which discusses upgrades to the existing protocol and we suggest the DAO consider. Of course, we can’t implement any protocol change ourselves, even if we wanted to. But here, we’re not proposing a specific change, or even a general one ; we’re not endorsing a view or set of views; and we’re not going to release any proposals or lobby for one during this nascent stage of governance. These are simply matters and concerns that we’ve found interesting, and wanted to highlight for others to consider.

Some current issues or problems in the existing AMM design are as follows:

• Users don’t get the full yield of the position they are wrapping, since 1/2 of the supplied liquidity sits as a base asset, let’s say USDC or stETH instead of the growth asset of the yield position.

• Pricing on fixed rate assets in the AMM are currently impossible to get in a safe way, since an efficient oracle has not been introduced yet and it is pivotal for principal tokens and fixed rate assets to propagate as collateral in the market. Principal tokens as collateral across the DeFi ecosystem introduces powerful applications. This post dives into some of the early benefits. The hypothesis is that with more and more integrations, the use of the protocol will be significantly enhanced, driving stronger fixed rates and a better APY for LPers.

• Accounting is overly burdensome, especially since a lot of it could be included as part of the AMM. Yield token compounding, yield token purchases and more lack efficiency since they are not integrated or taken into account within the AMM.

• The current LP process lacks capital efficiency as most of the capital sits stagnant while rates only diverge by a small % delta over the term duration.

Some existing research on the problems above:

• Yieldspace has tackled the capital efficiency problem and looked at including an AMM with dual-sided yield bearing assets, they are finalizing new research here - https://hackmd.io/lRZ4mgdrRgOpxZQXqKYlFw

• Regarding the oracle problem, similar research has been accomplished from Yieldspace and can be referenced here:

• https://github.com/yieldprotocol/yieldspace-tv

• Sensespace V2 pool utilized yieldspace with yielding shares instead of the underlying. The yielding shares are priced using their initial price at pool deployment time and includes an oracle implementation

• Pendle’s Weighted balancer pool in which the price of the yield tokens approaches zero as they are expected to constantly have their interest claimed.

• Timeless Uni V3 no fixed AMM price curve. Note these perpetual bonds have quite different pricing properties than other examples.

• We’ve been pursuing research to solve some of these issues as well, but it is current ongoing research. Others may also have research that we haven’t yet seen or reviewed. And of course, we hope that others will do just that because this is a team sport.

Some other accounting issues and auto yield token compounding are greenfields and worth exploring and researching.

With the advent of a strong V2 AMM, it would make more sense to go through Element and a next generation AMM as an LP vs. go directly to the yield sources. This is because yield would always be higher through this approach vs. going direct, and it would position Element as the place to go for not only fixed yield in the space but also variable yield.

Conclusion

To reiterate: Part One describes certain projects built on top of the Protocol that we’re working on (and others may be too), but that doesn’t impact the core Protocol in any way. For Part Two, because we’re currently staying back from governance, we’re just highlighting some interesting concerns and issues that may be worthy of further research and analysis. But these are not proposals, and we are not endorsing or offering any solutions.

These are just some of the current endeavors we’re pursuing and we currently have specced out to complete over the next 9-ish months. We have 25 people, with really strong experience, pursuing these efforts in parallel. We’re excited for the next few months and to include everyone on this journey.

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.

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.

The GSC’s Role in the Voting Process

The GSC will have the ability to propose votes directly on-chain without the typical proposal threshold that all governance members will be subject to. For a detailed description of the difference between the typical governance process and the GSC governance process, check out the Element Governance Proposal Framework post here.

The authority to propose votes directly on-chain without the typical proposal threshold is enabled through the custom GSC voting vault, which gives one vote to each GSC member. An example of this in the wild is the first proposal that came from a GSC member (here), which was for increasing the current GSC quorum threshold from 1 to 3. The result being that now it will take 3 GSC members to pass a proposal on-chain instead of the launch default of 1. This proposal was pushed forward and passed by the GSC.

Additionally, since the GSC will have significant voting power delegated to it, the GSC may also propose votes with their own delegated power through the main core voting contract. However, it is important to note that, because of the minimum voting period, the GSC cannot make proposals directly on-chain and then pass them immediately without the input and support of the governance community. This failsafe prevents potential abuse by the GSC.

GSC Dashboard Overview

Users can access the GSC dashboard on the left menu from the Element governance dashboard.

It allows members of the GSC to:

• Join and formally accept their role in the GSC

• Push proposals to an on-chain vote (bypassing the off-chain sentiment poll)

• Vote on proposals

• Leave the GSC voluntarily

• Kick other members that have fallen under the current threshold: 0.9% of the total circulating votes delegated to them (currently 110k votes)

It allows members of the Element community to:

• View GSC eligibility

• View activity and hold GSC members accountable

• Track the GSC members assigned voting power

• View a list of “Rising Delegates” who are close to the GSC eligibility threshold but not already eligible

• Kick members that have fallen under the current threshold: 0.9% of the total circulating votes delegated to them (currently 110k votes)

  If you are an elected member of the GSC, please head on to the GSC dashboard and start participating in the governance of the Element DAO today!

A Walkthrough of the GSC Dashboard

Users can access the GSC dashboard by clicking on the left menu of the Element's governance dashboard and then connecting their wallet in the top right-hand corner. Keep in mind that elected members of the GSC will have access to extra features that won't be visible to the rest of the governance community.

The main sections of the dashboard are:

1. Governance Portfolio

2. Overview, Current Members, and Rising Delegates

3. GSC On-Chain Proposals

You can see each section highlighted in the screenshots below:

GSC Dashboard Sections

1. Governance Portfolio

The Governance Portfolio section displays

• Your voting power: the amount of voting power that has been delegated to the logged user

• Your GSC Eligibility

  • Displays if the logged user is eligible to become a member of the GSC. If the user is available, the "Join" option will become visible, and the user will be able to join the GSC by clicking on it.

• Displays when the logged user has lost eligibility as a member of the GSC.

• Your GSC Status: displays the GSC status.

• Leave Button: it allows an elected member of the GSC to voluntarily quit as a member of the GSC if he wishes to do so.

2. GSC Overview, Current GSC Members and Rising Delegates

2.1 GSC Overview

The overview section displays a GSC FAQ.

2.2 Current Members

The Current Members section displays the current GSC members and the amount of voting power delegated to them.

If the voting power delegated to a member of the GSC goes below 0.9% of the total circulating votes (currently 110k votes), the Kick Member option will become visible in red. Any community member can kick the GSC member who’s no longer eligible.

2.3 Rising Delegates

The rising delegates’ section displays the community members close to becoming eligible as new members of the GSC.

3. GSC Governance Proposals

The GSC Proposals section displays

• The user’s voting history

• The current proposals being voted

• The current state of a proposal, in progress, active or past

• Vote for, against, or abstain (only visible for GSC members)

We’re excited about launching the GSC dashboard and can’t wait for the elected members to start voting on proposals.

If you are an elected member of the GSC, head on to the GSC dashboard and start participating in the governance of the Element DAO today.

Final Thoughts

Ultimately, we believe that scaling governance is not necessarily just about getting more participation or more direct democratic control of the system, but about scaling the number of decisions that can occur per period of time, given that decisions are representative of the Element community. The GSC and the GSC Dashboard will help mitigate the need for individual voters to actively participate in governance and only require their attention when it truly matters, thus reducing the risk of community members feeling voter fatigue and apathy.

Join the Community! 🧝

We want to hear from you! You can always ask questions in our Discord if you need any help, feedback, or just want to learn more about Element.

Twitter | Discord | Website | Github | Docs

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:

• https://github.com/element-fi/frontend-monorepo/tree/main/apps/liquiditymining

• https://github.com/element-foundation/peripherals/blob/main/contracts/MCMod.sol

• https://github.com/element-fi/nft-regenerative

• https://github.com/element-fi/elf-council-zkcontracts

• https://github.com/element-fi/analysis

It is equally important to stress what we are not doing. This is not a proposal, a recommendation, a suggestion, an insinuation, or a hint. The items that we have open-sourced may become a basis for discussion, a fork, revision, or outright rejection. Element Finance and its team will not participate in any forum discussions regarding whether these codes are used, or, if so, how they would be used. And if there are votes about them, we will refrain from participating, directly or indirectly, in such votes. This is only a publication of code, without more.

When we launched governance, we meant it. And we still do.

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.

We believe that this initial governance framework will bring the minimum amount of order needed to move the Element DAO forward.

The initial Element Governance Framework is outlined below:

1. Guidelines of Element’s Governance Proposal Framework

2. Governance Venues

3. The Governance Process

4. Voting Information

5. What Governance Controls Today 🔐

6. Current Governance Roles 👨‍👨‍👦

7. Governance Protocol Documentation & Resources

Let’s dig in.

Guidelines of the Element’s Governance Proposal Framework (EGPF)

There are no hard-and-fast “rules” for the format of proposing changes in governance; indeed, those “rules,” if to be adopted, would be imposed by the vote of governance itself. However, we suggest that proposals should be straightforward, actionable, and clear with the following principles in mind:

1. Explicitness: A proposal should clearly define and address a specific behavior or single responsibility. If it proposes multiple actions, it should be split into multiple explicit proposals.

2. Completeness: A proposal must be thorough. Relevant particulars should not be left undefined or unreferenced.

3. Avoid overlap: Multiple independent proposals should not propose the implementation of the same type of behavior. Review active proposals to avoid overlap.

4. Clarity: A proposal should be as clear and as easy to understand as possible. It should be succinct, use simple language, and consider having a peer in the community review prior to submission.

Governance Venues

Commonwealth Governance Forum: The best way to get yourself up to date with the current state of governance is to join the discussion with the community on the forum. The forum will be the go-to place for submitting proposals, discussing governance proposals, DAO discussions, voting on both off-chain and on-chain proposals, and much more.

Snapshot (Off-Chain Polling): Snapshot is a simple voting interface that allows users to signal sentiment on proposals (directly) off-chain.

Element Governance Dashboard: View your specific Element governance dashboard, review information on proposals, delegate your voting power, and participate in on-chain voting on various proposals submitted by the community.

Discord #Governance-Proposal-Discussion channel: Discuss proposal ideas, provide feedback on current proposals, provide opinions on current polls and votes, and more.

The Governance Process 🔁

Element Governance Proposals (EGPs): EGPs are standardized proposals subject to voting that (once enacted) regulate and define the behavior of the Element DAO's Governance system and the Element Protocol.

Proposal Types

1. Protocol (Executable): This category of proposals should be used when implementation involves the execution of one or more smart contract operations by accounts controlled by the Element DAO.

   Examples: Technical upgrades to the Element Protocol, additional features, incentive programs, and more.

   Details: Executable Proposals will pass by a simple majority if the quorum has been met. Note that quorum isn’t a percentage but rather a flat amount. There are specific types of votes that can have lower or higher quorums. For example, when spending for grants, spending may involve having various amounts and having different quorums for each level of spending. Or, for governance actions such as freezing the protocol, one might choose a high quorum for further security.

2. DAO (Social): This category of proposals should be used when a community member makes a request of the DAO that cannot be executed or enforced on-chain.

   Examples: Adding, improving, or removing governance processes, such as updating the Element Governance Framework itself or migrating forums or communication channels to other venues.

The Proposal Process

There are two proposal processes within the Element Governance Framework:

1. DAO (Social) Proposals

2. Protocol (Executable) Proposals

1. DAO (Social) Proposals

Official Status Lifecycle for a DAO (Social) Proposal:

[Idea] ➡️ [Draft] ➡️ [Proposed] ➡️ [Review] ➡️ [Off-chain Poll] ➡️ [Accepted/Rejected]

• Detailed documentation on the process can be found here.

• DAO (Social) Proposal Template

2. Protocol (Executable) Proposals

Full Lifecycle For A Protocol (Executable) Proposal:

[Idea] ➡️ [Draft] ➡️ [Proposed] ➡️ [Review] ➡️ [Off-chain Poll] ➡️ [Review] ➡️ [On-chain Vote] ➡️ [Accepted/Rejected] ➡️ [Execution]

• Detailed Documentation on the process can be found here.

• Protocol (Executable) Proposal Template

Voting Information (Off-Chain & On-Chain)

Off-Chain Voting Information (Snapshot)

• Vote for free (gasless)

• Votes are signed messages easily verifiable online

Off-Chain Polling Parameters:

On-chain Voting Information ⛓️

After a proposal has been created on-chain it is subject to a Timelock Duration, Voting Periods, and Quorums. The initial governance (GSC, voting, delegation, etc) parameters can be found below.

Important Note: All parameters described above may be changed by the governance community through a proposal and vote.

On-Chain Voting Parameters:

GSC-Only Parameters:

What Governance Controls Today 🔐

Current Governance Parameters

General Governance:

• Quorum: The required minimum number of voting power in support of a proposal for it to succeed (this value is fixed and not a percentage of total voting power).

• Timelock Duration: The timelock is a speed bump for calls. It requires calls to wait for a defined period before they can be executed. After a call is registered, the call can be removed during the waiting period, and an authorized address can extend the waiting period only once.

• Voting Period: The total voting period in which votes can be cast. [Minimum voting period][extra voting period] is the layout of the total time for voting.

• Minimum Voting Period: The minimum voting time before a vote can be executed.

• Extra Voting Period: The remaining time beyond the minimum voting period in which votes can be cast.

• Vesting Vault Token Multiplier: The vesting vault contract is used to set up long-term grants for core contributors to the Element ecosystem. It is also a voting vault so that community members can vote with vested but unclaimed tokens and unvested tokens. The multiplier for voting power on the vesting vault allows locked / vesting positions to still have voting power in the governance system and does so by using a defined multiplier for the vested tokens over unvested.

• Proposal Threshold: The amount of voting power needed to submit a governance proposal on-chain.

GSC Parameters:

• GSC Delegation Threshold: A threshold of delegated voting power, giving delegates a seat on the GSC. This comes with additional governance powers within the system, and as a result, additional responsibilities.

• GSC Quorum: The required minimum number of GSC members needed to support a proposal for it to succeed.

• GSC Proposal Threshold: The amount of GSC members needed to propose a GSC vote on-chain.

Current Protocol Parameters

• Collecting and Setting Fee Rates: Changing Protocol trade fees, collecting affiliate fees from partner protocols such as Yearn, and more.

  • For example, currently, Protocol trade fees are split between the liquidity providers, the Balancer V2 protocol, and the Element Protocol. Both the Balancer V2 and Element Protocol fees start at 0% and are bound at 30%. Balancer V2 fees are deducted directly from the pool's holdings, but Element protocol fees must be collected to an address (possibly to the GSC or to the Element DAO treasury depending on what governance decides). Governance has the ability to increase or decrease the trading fee structure.

• Protocol Upgrades: Should the Element DAO governance community decide to upgrade the Element Protocol, it will go through governance. These types of changes will go through the process defined for Protocol Proposals.

Current Governance Roles 👨‍👨‍👦

Delegates

• You can assign all of your Voting Power in the governance system to yourself or someone else, and they can vote on your behalf. This is called Delegation. It's important that you select a delegate who is aligned with your vision for how the Element Protocol should evolve, as your votes would be counted towards their selection. You can delegate in Element DAO governance here.

Governance Steering Council (GSC)

• 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 system, and as a result, additional responsibilities.

• The opportunity to be on the GSC is open to anyone and can be earned by garnering enough delegated voting power. On the other hand, GSC members will have to stay aligned and relate to the general sentiments of the public to maintain their positions on the Council and make the best decisions for their delegators. Otherwise, they may lose their delegated votes to another GSC member or new governance community member and fall off from the council (a failure for a specific GSC member to accrue delegated votes would indicate their disconnect to the general community of voters).

• In the future, GSC members may have other special functions (propose votes directly on-chain, spend a portion of treasury funds at their discretion, etc.), different responsibilities (DAO2DAO relationships, collaborations, treasury management, community engagement, etc.), and might (depending upon a vote) be compensated for the time and effort that they dedicate to improving the Protocol. All of these functions and responsibilities must be defined and ratified through the governance process.

Note: being a delegate and a GSC member is not mutually exclusive.

Governance Documentation

• Element Governance Proposal Framework (EGPF)

• Governance Glossary

• Forum

• Medium

As part of the distribution, we’re proud of a few innovations we pursued, which we cover in the following sections.

Ethereum Core Developers and DeFi Ecosystem Projects

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.

Claiming Through ZK Dashboard for Privacy

Since rewarding contributors requires association with a GitHub or Discord profile, we’ve developed a claim flow using Zero Knowledge Proofs which allows for privacy. Claimants can collect their voting power without associating their profile with an Ethereum address. We’re excited for this innovation which was implemented on Sam Ragsdale’s smart contract work.

Elfiverse and the Intersection of DeFi and NFTs

The Elfiverse is a gift for the Element community to commemorate the launch of the Element DAO. It serves to represent, reflect, and amplify the community involvement in Element. This thread gives a bit more context on some of the goals of this project.

The first 4,700 claimants who delegate to themselves or to another person in the Council UI will be whitelisted to mint an ELF NFT. There will be no minting fees and users only need to pay for gas. We’ll follow up quickly with details on distributing the remaining 5,300 ELFs.

DAO Overview

In order to encourage participation in voting and governance, we’ll soon launch a Governance framework which outlines the path to take a proposal or idea to on-chain finality.

We’d like to see the DAO involved in a number of initiatives. Onboarding new assets and terms, launching new yield sources, supporting research or product initiatives, and helping the development and growth of Element, such as grants, hackathons, meetups and more are some suggestions that could be implemented by the DAO. But while these are ideas, those decisions will be made by governance as a whole. And – more importantly – we’re excited to see what new ideas and proposals that others in the community will bring and offer. This is the promise of decentralization, and why we’re thrilled to see the DAO take center stage.

Initial Parameters

Proposals will require the support of at least 55k (0.45%) tokens to go to a vote and a simple majority voting to approve with a quorum of 1.1m tokens or 9.1% of initial circulating supply.

In order to make it into the Governance Steering Council, you should receive at least 110k or 0.9% of circulating supply delegated to you.

These parameters can be updated by Governance.

Voting Distribution

The contract address for ELFI is: 0x5c6D51ecBA4D8E4F20373e3ce96a62342B125D6d

There will be 100 million total ELFI, with 51% allocated to the community. The distribution is as follows:

• 10% Retroactive

• 21% Team, Advisors and Strategic Partners

• 21% Investors

• 7%   Foundation

• 41% Treasury

Team and investors will be subject to a one year lockup followed by a 2 year linear vesting period.

Retro

The intention of the retro is to distribute voting power broadly across the Element community. 10% of the total ELFI distribution will be retroactively distributed to 15,870 addresses as follows:

• 7.5% Votes to 9,989 Element Users

• 2.50% Votes between 500 Element Community Members and 5,381 Ethereum Ecosystem Contributors:

  • Click here to view the Community Member distribution list.

  • Click here to view the list of repos included in the distribution.

Snapshot Date: March 1st, 2022.

Element Users

Element Users are divided into the following categories:

• 3.5% to Liquidity Providers: This is distributed to users proportionally based on the length of time x the amount of Liquidity Provided

  • Minimum requirement to qualify:  greater than $500 LP’d for 90 days

• 3.5% to Traders:  This is distributed to users proportionally based on the amount traded

  • Minimum requirement to qualify:  greater than $500 traded

• 0.5% to Minters: This is distributed to users proportionally based on the amount minted

  • Minimum requirement to qualify: greater than $10k minted

Element Community

With some filtering (e.g., to filter stop words) to ensure meaningful contributions, the distribution is grouped into three tiers:

• Top 50 get 819 votes each

• Next 100 (rank 51-150) get 409 votes each

• Next 350 (rank 151-500) get 205 votes each

If you are eligible for the community distribution, there is a ZK claim process so you can maintain privacy and prevent doxxing of your Ethereum address.

Ethereum Ecosystem Contributors

The distribution is grouped into four tiers:

• Ethereum Core Devs: 2,250 users get 614 votes each

• DeFi projects that Element built on: 1,586 users get 409 votes each

• L2 Projects: 850 users get 205 votes each

• Other DeFi Ecosystem projects: 695 users get 205 votes each

We analyzed a number of GitHub repos and allocated voting power to their contributors. If you are eligible for the ecosystem distribution, there is a ZK claim process so you can maintain privacy and prevent doxxing of your Ethereum address.

How to Claim

There are three different claim flows depending on your allocation. We have a guide for each. The claiming process will go live later today.

1. Element User Guides here.

   Expiry: One year to claim

2. Element Community Guide here.

   Expiry: Users will have one week to generate a public ID using the ZK flow. A merkle root will be posted and after a week they can claim. If users miss the first week window, we will follow up with a 2 week window after and continue to follow up with claim opportunities for one year.

3. Ethereum & DeFi Ecosystem guide here.

   Expiry: Users will have one week to generate a public ID using the ZK flow. A merkle root will be posted and after a week they can claim. If users miss the first week window, we will follow up with a two-week window after and continue to follow up with claim opportunities for one year.

Keep in mind that if you claim early and delegate, you’ll have a chance to earn an ELF NFT as part of our Elfiverse community initiative.

Voting Vaults

Voting vaults are a core part of the Council Governance Framework. They allow for redefining what constitutes a vote and how a vote operates. We’re launching with two voting vaults, the Vesting Vault and the Locking Vault.

Vesting Vault

The vesting vault applies to investors and team members. It applies a multiplier on unvested tokens, giving this group reduced voting power. We’ve initialized the voting vault at a 5% multiplier. As a result, team voting power will be only 8.7% of the circulating total at launch.

Locking Vault

When claiming your voting power or ELFI, it will be automatically staked in a locking vault. Your ELFI cannot be removed from this vault and is intended to keep the utility of ELFI as a voting tool.

In terms of future voting vaults, there are many ideas to explore and consider such as the concepts highlighted in this blog post.

Next Steps

The launch will occur on March 31, 2022, at Ethereum block number 14496292, at approximately 5 pm ET. Stay tuned for announcements on our Discord or Twitter. We’re excited to welcome the new governing entities of the Element Protocol. We’re so proud of the team that has brought us this far; and now we’re thrilled to see the future in the hands of governance as this next chapter begins.  We’re optimistic the future governors will steward the protocol in a responsible, thoughtful, and ethical way.

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).

The Way

The gates are now open for you to take a step into the Elfiverse, the community growing around the Element protocol. A place where all are welcome, you choose your role. You can share stories around the campfire directly with the team on Discord, where we’ve started hosting AMA sessions. Or take the new path to engage directly in the governance of the Element protocol. Today we open up a brand new portal into the Elfiverse: community forums lovingly hosted using Commonwealth. By following the delegation nomination process and making a post in the appropriate thread, anyone can become eligible to receive delegated voting power. Empower your true elf, and join us in shaping the future of Element.

What happens next? After the nomination period, those with voting power will be able to delegate their votes to anyone from the list of delegates. Those following closely will know we haven’t yet revealed how voting power will be assigned. With so many options afforded to us by our flexible custom voting vaults, we’ll wait a few more days to announce those details, and maybe some other surprises for our community along the way. Keep checking in regularly.

While anyone can become a delegate, and being entrusted with wielding voting power on behalf of another is already a solemn responsibility, those with Lofty Ambitions may seek to gather enough voting power to become a founding member of the Governance Steering Council.

Lofty Ambitions

Those willing to take on a greater adventure, and the accompanying greater responsibility, will be automagically selected to join the Council upon reaching the required vote threshold (initially set to 0.9% of total voting power). The required threshold of delegated voting power must be met at all times, or risk losing your seat to the ruthless logic of the Council smart contracts. Don’t worry, we’ll still like you.

To begin with, GSC responsibilities will include proposing votes directly on-chain, managing grants, and using the treasury budget up to a specific limit. The DAO retains ultimate power to change these limits at any time, restrict the Council’s powers, eliminate it altogether, and even decide on new responsibilities for the GSC, such as:

• Governance Management

• On-chain voting

• Treasury Management

• Continuously Thinking About Protocol Improvements, Partnerships, and DAO Structures

• Security Maintenance

• Optimistic grants distribution

• Governance experimentation and incentives

You can read more details regarding the GSC structure and possible responsibilities in the GSC explainer here. 

Stronger Together

This is just the beginning of a long path toward a fully community-governed protocol. We expect Element governance to evolve and become stronger over time but believe that selecting the best candidates to represent the interests of the community is an exciting start.

The initial group of delegates and elected GSC members will have the unique opportunity to lead the Element DAO from inception, contribute to shaping its vision, and play a vital role in defining the protocol’s roadmap. This is an open invitation to contribute to the future of the Element ecosystem and to leave a mark in the future of Web3.

Ready to Nominate Yourself as a Delegate?

If you’re ready to take an active role in Element governance, now’s your chance!

To propose yourself as a delegate and potential GSC member, the first step is to post on the Element forum following the delegation nomination process described in this thread.

Get involved and become a GSC delegate today. Start campaigning and good luck to all!

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