Elk Weekly Recap — #3

The second week of ElkNet saw an impressive 75% rise in volume, tallying a staggering 210,000 $ELK transferred between chains. A new round of farming on ElkDex closed out the week, offering a fresh opportunity to take advantage of Elk’s unique Impermanent Loss Protection (ILP) feature.

Week in review

• HashEx, a leading security firm, completed audits of ElkDex contracts on all chains (link to report)
• Pangolin (Avalanche), the largest Avalanche DEX by TVL, hosted Elk for a voice AMA on their Telegram (link)
• We hosted a text AMA with Spiritswap (Fantom), a leading Fantom DEX, on our Discord (link)
• Promotional farm boosts were introduced on ElkDex to foster growth among community projects and network partners. The first boosts were awarded following this week’s AMAs to PNG-ELK (tweet) and SPIRIT-ELK (tweet)
• Three new farms launched ElkDex Avalanche (VSO-ELK, JOE-ELK, and (XAVA-ELK) (tweet)
• Impermanent Loss Protection (ILP) was activated on ElkDex HECO (tweet)
• We published an in-depth article on ElkNet, “A Closer Look at ElkNet” (link)
• We launched Elk Academy, our new educational series geared toward new DeFi users (link)
• Snowball (Avalanche), created a snowglobe (automatic compounding vault) for Trader Joe’s ELK-AVAX pool (tweet)
• Zerion, a DeFi portfolio manager, added tracking for ELK token on Polygon
• Price tracking bots were added to our Discord + Telegram channels
• Round #6 of farming went live on ElkDex on August 1, resetting ILP timers. The new cycle runs through September 11.

The Team Desk

Bridges! Bridges! Bridges!

Second week, and ElkNet continues to hum along. The few problems we’ve seen since relaunching have been related to sluggish network RPCs, which of course is not an issue related to ElkNet but the chains we service. Meanwhile, the throughput and total volume over the network continues to exceed our expectations.

This week we’ve taken note of several new network and service-oriented bridges launching, including a major update to the Avalanche-Ethereum Bridge (AEB), which has been rebranded as simply the Avalanche Bridge (AB).

While at first glance, these new network bridges may appear as competitors for Elk, we view them as welcome developments in the DeFi arena that will further Elk’s vision of a seamlessly interoperable multichain experience.

Here, it is important to remember that ElkNet is not merely a bridge (i.e. critical infrastructure), and moving value across chains is just one of the myriad cross-chain operations that ElkNet makes possible.

Network-hosted bridges are useful for providing on- and off-ramps for a single network, meanwhile service-oriented bridge protocols offer a way to connect multiple networks but quickly run headlong into the fragmentation and exit liquidity issues that all traditional bridge projects have faced.

For some excellent insight into these issues, we recommend this Twitter thread by Connor Daly, creator of Pangolin DEX, outlining “The Bridge Fragmentation Problem.” He makes a persuasive case for why asset fragmentation is actually a bigger setback than scalability for widespread crypto adoption.

The Elk Effect

The unique vision behind Elk is to build a protocol that exists autonomously but can be seamlessly grafted onto every other network, essentially turning them into so many appendages (or, if you will, points on Elk’s antlers). While ElkNet alone cannot solve every aspect of bridge fragmentation (after all, we cannot control how other cross-chain protocols handle their tokens), we are uniquely equipped to address the general problem through our core design and specific features.

Since only ELK tokens move through ElkNet, the tokens swapped on either side can match, but they can also be wholly arbitrary. In tech speak, the swap function is “token agnostic,” which is a fancy way of saying that it doesn’t matter what token you throw in the hopper, so long as there is a viable path connecting to ELK.

This gets around the Tower-of-Babel effect, where there are countless chain-specific wrappers or token derivatives, resulting in new protocols with no other purpose than to shuttle between the many versions of the same asset. With ElkNet, there are no wrappers.

Proxy token

In a similar way, our upcoming CHFT stablecoin addresses fragmentation by providing the first pegged asset that can operate as a “native” token wherever it is minted. Finally, our proxy token concept, which is also slated for release soon, further tackles the fragmentation problem through a wholly novel cross-chain token mechanism.

In short, Elk’s goal is not to replace network or service-oriented bridges so much as to compliment them. With the forthcoming launch of Elk nodes, which will allow developers to launch multi-chain dApps via the forthcoming ElkNet SDK, this crucial distinction will come even more sharply into view.

Note on Round #6 Farms

For Round 6 of farming on ElkDex, we have made some changes to the list of supported pairs, the weightings for each pair, and the overall emissions. These adjustments consider each chain’s relative TVL as well as Elk’s overarching tokenomic goals.

We are not a conventional DEX, and our highest priority is to provide ample liquidity for running ElkNet. We are also focused on maintaining sustainable emissions during this key expansion phase, as we prepare to bring many more networks into the Elk ecosystem in the coming weeks.

Since the ELK token will eventually grant holders ownership over the direction of the project once governance is live, we are likewise committed to ensuring a reasonable distribution of tokens across chains.

Elk is a community project. We are therefore deeply committed to supporting other community projects and network partnerships across each of our chains. For the start of this round, we have reduced the emissions for multiple community tokens.

This reduction is part of a larger strategic plan, which leaves room for increasing incentives and offering promotions throughout the course of the 42-day cycle. All of the changes we implement are incremental and based on multiple factors, including trading analytics, price forecasts, and community input.

If you woke up to find your favorite farm removed or with its emissions cut, we ask that you remember that each new round presents new opportunities for growth, ensuring that Elk remains dynamic and will not stagnate.

The week ahead

• The ElkDex User Interface (UI) will be receiving an upgrade, the first step in a more comprehensive redesign of the Elk website and dApp. Look out for teasers and an article discussing the rethemed UI and larger plans for the complete redesign
• Tin.Network, a DeFi portfolio manager, will be adding support for ELK token and ElkDex farms on HECO, Polygon & Fantom