March 10th, 2022 - The Algorand Foundation welcomes Element DeFi 2.0 Hub to the Algorand ecosystem as our latest grant recipient. Element has been awarded grant funding to support them build the first Stablecoin DeFi SuperMarket on Algorand (not just DeFi Marketplace), where a crypto user gets all the services in one place.
STABLECOIN TRILEMMA PROBLEM
It's a well-known fact that blockchains are often forced to make trade-offs that prevent them from achieving all three aspects: decentralization, security, and scalability. Like blockchain, stablecoin protocols have their own trilemma problem b/w decentralization, stability, and capital efficiency. Several protocols were introduced to meet these three, but none succeeded. ELEMENT designed a new paradigm to remedy several pitfalls and risks associated with the so-called 'Stablecoin trilemma' problem by introducing a new kind of capital-efficient protocol incorporating several resilient game theory economics together.
Element aims to be a portfolio of stablecoins powered by two innovative protocols and a cohesive ecosystem of interconnected DeFi 2.0 Apps built for the borderless future.
- TAU PROTOCOL - The Non-dilutive Algorithmic Fractional Stablecoin Protocol that orthogonally regulates the price dynamics via its novel Autonomous Demand Supply Balancer (ADSB) Stabilization algorithm through elastic supply adjustments, burn and bonding mechanics within a closed ecosystem.
- ELECTRON PROTOCOL - The First Risk-Free Lending and Liquidity Protocol to issue liquidation-free loans and capital-efficient DEX Services
- DeFi 2.0 Hub includes a Zero-Fee AMM, Premium KYC and DID enabled Launchpad, Liquidation Free Money Market, Yield Farming, LP Staking, and NFT Market platform - all in one place.
These two protocols would serve as the stepping stones towards capital efficiency, stability, risk-free lending, and liquidity for a strong and more open finance future for the masses.
CPI Pegging Model
Most financial transfers consume country-specific denominations. Hence, it is crucial to create country-specific stable coins to support local and regional commerce. Element aims to address vital region-specific currency needs as a multidimensional stablecoin platform, each pegged to the world's major currencies. The platform will issue stablecoins pegged to USD and INR during the genesis period and gradually extends its branches to cover other countries over time through community voting.
Element’s Stablecoin as a Service platform in the longer term will leverage Algorand’s co-chain architecture and acts as a one-stop shop for futuristic TradFi and Central Bank Digital Currency (CDBC) related initiatives.
Element Fi participated in Whub.io’s Sustainable Future Economy Algorand Hackathon in Asia in November 2021, winning 1st prize for their protocols. 'Element Fi's Algorithmic Stablecoin is an innovative application focusing on elastic supply fractionals. It's exciting to have them released on Algorand testnet’. - Daniel Oon, Head DeFi, Algorand Foundation
For more information on Element DeFi, please visit their website at https://www.elementfi.io, follow them on Twitter or join them on Discord.
If you are interested in submitting a project for support from the Algorand Foundation Grant program, please apply here.
