Elk Finance litepaper v1.0 (March 11, 2021)
Cross-chain value exchange is the next battleground for cryptocurrencies and the next major hurdle for adoption. Currently, moving or exchanging tokens across chains is a very painful and expensive process. Elk.Finance aims to make this process easy and intuitive. We aim to be the Forex market for the decentralized economy, providing sub-second value transfers across chains. "Any chain, anytime, anywhere" is our motto. Join us as we embark on this exciting adventure!
The ELK token is an ERC20-compatible utility token that underpins the Elk.Finance ecosystem. Central to the design of the Elk network is the fact that all liquidity pools pair exchange tokens with ELK. This design decision allows for sub-second transfer of value across chains and provides deeper liquidity for pools, reducing slippage and fees. ELK also doubles as the governance token for the Elk network.
Elk.Finance aims to support cross-chain swaps of arbitrary tokens at sub-second speeds. By combining a state-of-the-art liquidity pooling system with a decentralized peer-to-peer network, we can achieve fast, trustless, and cheap swaps across different chains. We believe value transfer across chains will play a large role in the adoption of cryptocurrencies over the coming years. Current solutions to that problem are slow and expensive. Elk.Finance will change that.
In order to facilitate cross-chain value transfers and payments with minimal risk, Elk.Finance will release a stablecoin called CHFT. Upon release, CHFT will be the first cross-chain stablecoin based on a gyroscopic design.
Our community has the opportunity to participate in yield farming by providing liquidity pairs to bootstrap the Elk network and locking these pairs in staking contracts. The bulk of ELK tokens will, therefore, be distributed to early adopters of the Elk network. The sooner you join, the larger your rewards will be!
At Elk.Finance, we believe in taking special care of our liquidity providers. In particular, it would not do if a liquidity provider decided to participate in the Elk network and suffered from impermanent loss (IL) as a result. "Investor" in the network should not walk away with less, ever! Therefore, we are going to implement IL protection for ELK Liquidity Pools. This insurance will take the form of additional ELK token payments (to be claimed as part of the staking contracts) in case the price of ELK drops drastically.
Note that in order to benefit from IL protection, you will need to stake your liquidity pairs! More information can be found here in the docs.
We started with the Avalanche blockchain and have also added Polygon (MATIC), Fantom, and Heco , Binance Smart Chain, XDai, and many many more. Ethereum will soon be supported. The reason we started with Avalanche was because we planned for Avalanche to be a little bit more "central" to Elk.Finance than others. Avalanche truly is a chain apart (so to speak) and has a very bright future.
Below is an overview of the Elk.Finance roadmap* for 2022 and beyond.
- Cross-Chain Swaps- Ability to Utilize Cross-Chain Liquidity Pools
- Release of Elk Software Development Kit (SDK) Beta
- ElkNet Proxy Token Upgrade- Unlocking Utility of Moose NFTs
Plans for 2023 and beyond:
- Mainnet Nodes- Secure ElkNet by staking ELK
- Elk Launch on Non-EVM Chains
- Community Governance
- Continuous Chain Expansion
- CHFT Cross-chain Stablecoin Pegged to Swiss Franc
* Note that all dates in the roadmap are estimates and subject to change.
* Note that all dates in the roadmap are estimates and subject to change. See here for more detailed roadmap.
The figure below shows the distribution of ELK Tokens. Elk.Finance is a community-driven project. The founding team members and advisors will be allocated a total of 2 million ELK tokens (a little under 5% of the total supply) with a 3-year vesting period based on achieving milestones. 10 million ELK tokens will be provided as incentives to liquidity providers. Another 10 million will be allocated to an insurance fund that will protect liquidity providers against impermanent loss. 1% of ELK tokens will be dedicated to airdrops and marketing efforts. Finally, 20 million ELK tokens will be locked in a community fund and their use will be voted by the community. We aim for a slow release of $ELK tokens over the years.
Elk Finance Tokenomics
We will distribute the 10 million liquidity provisioning tokens over the years to liquidity providers with halving every year according to the following schedule:
- 1st year: 5 million ELK tokens distributed.
- 2nd year: 2.5 million ELK tokens distributed.
- 3rd year: 1.25 million ELK tokens distributed.
- 4th year: 0.625 million ELK tokens distributed.
The insurance fund token will be distributed to protect liquidity providers against impermanent loss up to a limit of the daily distributed rewards for liquidity provisioning. For example, in the first year, no more than 5 million ELK tokens will be paid by the insurance fund (if applicable), thereby limiting inflation. The community fund tokens will initially remain locked away and their distribution will be performance according to governance decisions by ELK token holders.
Note that initially the token release schedule will slightly vary across chains based on the start of yield farming. Each chain will start with a maximum of 4 million ELK tokens, allocated in the same proportions described above.
We are also advised by several academics, finance experts, and blockchain experts.