The Journey of Cross-Chain Bridges and Interoperability

The post Unlocking Seamless Connectivity appeared first on Elk.

It’s fair to say that Q is aiming high, we applaud them for this goal setting attitude, and are pleased to connect Q’s EVM to ElkNet. This means that Q is now one of 30 connected blockchains on our network. The ELK token can be rapidly sent between these chains — and no ELK has ever been lost. Long may this continue to be true.

What does Elk bring to the Q?

As a protocol comprising of a few moving parts, Elk can provide the following right now:

ElkDex

A Uniswap v2 decentralized exchange (DEX)

Permissionless liquidity pools

pair tokens and swapping is immediately enabled

Permissionless liquidity farms

These provide liquidity incentives to liquidity pools without whitelisting or lengthy negotiations.

• Farm-as-a-Service (FaaS) allows for multiple token rewards to be assigned to LP staking positions. Up to 15 tokens per farm. Imagine providing liquidity and earning LP fees AND 15 other tokens on top of that!

Single staking pools

• While we wait for ElkNet nodes and validator staking, you can stake your ELK for rewards — a further means to distribute the ELK token to the community.
• Remember, ELK powers the ElkNet. No ELK? No interoperability and cross-chain functionality for you…

ElkNet

• An interoperability solution that is able to bridge ELK tokens between 30 EVM blockchains.
• The current version of ElkNet can move value between blockchains using ELK as a medium of transfer.
• ELK is native to every blockchain connected to ElkNet.

What should we Q for at Elk?

Elk is always building and improving the interoperability of the ElkNet. With a major goal being decentralization, including validators and token staking to secure transactions passing through the ElkNet, interim targets include:

Uniswap v3 ElkDex upgrade

• Concentrated liquidity
• More efficient token swapping
• More controllable liquidity farming
• Permissionless LP pairs for v3
• Permissionless LP Farms — FaaS v3

Bridge-as-a-Service (BaaS) rollout

• Enjoy the security and resilience of ElkNet for your cross-chain needs.
• Projects can make their token behave like ELK.
• Native to any ElkNet-enabled blockchain.
• Move through the ElkNet frictionlessly.

Projects can control:

• Fees
• Which blockchains to move to.
• And many other choices.
• Or make it wholly permissionless during the development phases!

The BaaS SDK will allow for bridging tokens, messaging and whatever the developers can dream up.

• ElkNet security + your imagination = Web3 interoperability

The end of the Q

In the coming days and weeks there will be a series of liquidity incentives shared with the Elk and Q communities (Q-munities?)

These include opportunities like:

• Farms
• QUSD-QDAI and QUSD-ELK (currently live)
• QUSD-WBTC & QUSD-USDC (planned for the future)
• ELK rewards
• Q token incentives have been added too, remember that users can harness FaaS to create farms and single stake pools with up to 15 different reward tokens to stakers.

Q faucet

To explore the ElkDex and ElkNet on Q you will need some Q tokens for gas.

• A faucet is available here: https://faucet.q.org/

FA-Q-s

Is there a Q faucet?

To explore the ElkDex and ElkNet on Q you will need some Q tokens for gas.

• A faucet is available here: https://faucet.q.org/

How do I get USDC, DAI, or WBTC on Q Mainnet?

These are pretty key questions! USDC, DAI, or WBTC on Q can be obtained by transferring from your wallet on Ethereum using Q’s bridge:

How do I get QUSD on Q Mainnet?

QUSD can be obtained by depositing USDC, DAI, or WBTC into a vault on Q’s Saving & Borrowing dApp, which will allow you to borrow QUSD:

What else do you reQuire from me?

We’d love to see you at the upcoming AMA sessions, read your X posts, answer your queries and listen to your suggestions in our social media groups on Discord and Telegram. Come and join us, the tide is turning, and it’s time to have fun.

Get to the front of the Q.

Website | App | Docs | Twitter | Telegram | Discord | LinkedIn | Reddit | TikTok | DefiLlama

The post Elk joins the Q: New bridge connection now live appeared first on Elk.

ELK is native everywhere — consider what this means for a decentralised token; how many tokens like this are there?

What’s in a name?

Since we launched, the ElkNet blockchain bridge (including the Bifrost smart contract for fans of Norse mythology and Marvel movies — another fun name) has effortlessly moved the ELK token to over 20 different blockchains. And ELK is native to each one of these blockchains, no wrapping, just native everywhere.

No ELK has ever been lost. Ever. We have not been exploited or made the headlines. Which is both good and bad. We are definitely under the radar.

And because the ElkNet only moves ELK (for now), the premise of our technology is lost on the “WEN WEN WEN” mentality of “crypto-chads” — get rich, get hacked, get out and everyone else can get rekt. Security, probity and longevity matter more to Elk.

A future where cross-chain is safe and easy is too hard to see and too far away.

Who even cares? Less than 5% of the world use Web3!

Web3/blockchain/crypto is full of idealists, innovators, idiots and criminals. Idealists drive the vision, innovators make it possible, we all make idiotic mistakes sometimes, and criminals prey on everyone. Avarice is rife and leads to further idiocy which leads to black swan events becoming commonplace. It’s a tough game!

As an idealistic idiot with occasional innovative thoughts, I’ve chosen a challenging path to walk, and I’m understandably frightened of the criminal minority ruining it for the majority that includes my friends, colleagues and, honestly, everybody else! This is because a change is underway. and it’s unstoppable. So, as Web3 pioneers we have a responsibility to make it safer. We have to be the deputies, the sheriffs and the marshalls in the Web3 Wild West.

What is Elk doing to make this future a reality?

Well, we aren’t compromising our core values of safety, simplicity and excellence for starters. There is no need to name the culprits of blockchain bridging disasters, or custodial exchanges ruining lives — they are the well-known leading criminals of Web3.

Elk is making infrastructure that is invisible to users. dApps built on ElkNet will use a decentralised technology that meets their specific requirements. Developers can easily make what they need, not struggle with the fragmentation and limitations of current leading bridges (which one will fail next I wonder?)

Furthermore, since this is Web3, individuals can participate in collective ownership. No massive companies scouring money from their customers, Web3 is an opportunity for the equitable distribution of wealth.

• Staking ELK secures ElkNet validators
• ELK pairs provide concentrated liquidity to the ElkDex
• ELK governance rights
• Users pay validator transaction fees
• Projects (DAOs) earn fees from bridging
• Any token can be move through the ElkNet — native everywhere
• And there is so much more, starting here

We aren’t going anywhere but forwards

The post Lodge Letter 70: Which blockchain bridge is right for dApps and developers? appeared first on Elk.

New blockchain connections were promised. Let’s start this next wave by announcing Bitgert Chain

Elk and Bitgert — connected

Bitgert offers a centralized exchange, a P2P marketplace, PayBrise (a payment gateway), and Geo Web3 Real Estate opportunities. To help connect themselves to the ever-growing blockchain world, Bitgert has chosen the future of cross-chain interaction and communications by inviting Elk into their world.

ElkNet will soon add Bitgert Chain to its growing list of connected blockchains.

And we’re happy to join!

Bringing ElkDex and ElkNet to Bitgert at this early stage in the development of our ecosystems allows Elk to broaden our blockchain reach, bring even more networks together and open the doors for new users to discover Bitgert Chain. Web3 citizens from 20 ecosystems now have a new choice for where they wish to explore via ElkNet, and trade assets using ElkDex, to discover new opportunities — with Bitgert.

About Bitgert

From the Bitgert Chain, a super-fast blockchain with over 100,000 transactions per second, to the Bitgert Centralized crypto exchange that offers zero-fee trading experiences, Bitgert has a full suite of products that make it easy for everyone to engage with cryptocurrencies.

With all these products and more, Bitgert is the fastest growing ecosystem in the crypto space, offering a comprehensive set of solutions to meet all the needs of the modern digital asset owner.

About Elk

Elk Finance is a peer-to-peer network for cross-chain value transfers. ElkNet, its cutting-edge multi-chain protocol, makes it easy for anyone to move value and exchange cryptocurrencies across blockchains quickly and securely at a low cost.

Move value between 20+ of the most popular EVMs, including BNB, Polygon, AVAX, and ETH networks. Earn ELK through Yield Farming, Single Staking, including earning multiple tokens from a single farm.

More is always coming from Elk, read more here:

Blockchain expansion: New Chains ready to explode onto ElkNet soon — Lodge Letter #69
Currently supporting 20 blockchains, the time has come for this to grow againmedium.com

Website | App | Docs | Twitter | Telegram | Discord | LinkedIn | Reddit | TikTok | DefiLlama

The post New ElkNet connection: Welcome Bitgert, a brand new cross-chain destination appeared first on Elk.

How are new ElkNet chains determined?

The community most certainly has a say in such matters. You may have noticed polls in the Elk dApp UI and our social channels where we enquire as to which blockchain ElkNet should go to next. Further to these questions are the needs of existing partners and where they’d like to see ElkNet lay further foundations. And we do feel we are here to help our ecosystem partners and users alike.

Let’s not forget that as soon as a chain is selected for inclusion in the ElkNet, the ElkDex will also deploy on the new chain; instantly creating an asset marketplace for ELK on a new chain. Elkbrings users a Dex, a bridge, LP farming, and staking opportunities. Builders can secure token liquidity using our self-managed farm creation FaaS tool, who’ll then be ready for easy cross-chain swaps to 20 OTHER chains. Then 25, then 30…you get the picture. We haven’t even mentioned the exciting stuff yet (keep reading).

Does this mean patience and hope is the only way to see ElkNet enter “your” ecosystem? No, it is not! However, in the ever-changing Web3 landscape where blockchains spring up (and sometimes sink away) all the time, taking a gamble on every single chain that appears on the horizon is not possible and not sensible. At Elk, we will certainly try to be everywhere, and we enjoy growing our ElkNet, but ecosystem builders can help too. We’ll bring our toys, for all topermissionlessly play with, and blockchains host the users, the partner projects – those seeking opportunity, liquidity, and flexibility to move from chain to chain.

Is a new blockchain coming? Or more than one?

Following conversations with several ecosystems, Elk is delighted to be expanding the ElkNet to embrace half a dozen new blockchains in the near future. Stay up to date with announcements for where we’re going to appear next by following our social media and community channels. We’re excited to join these new outposts of the ElkNet and help write their stories in crypto, blockchain and Web3, and are looking forward to sharing our new developments with these new blockchains as we all keep building towards inclusivity and interoperability.

As we continue Elk’s cross-chain journey through the spaces between blockchains, we find ourselves positioned such that if a chain is looking for ElkNet to land on their shores, then providing a grant, liquidity, marketing and business development support is a surprisingly effective way to bring Elk on board. We have plenty to offer and wish to strive for excellence alongside willing and capable partners.

Elk Finance coming to your blockchain?

Elk arrives on-chain…

When Elk Finance appears on a blockchain the following features become available:

ElkDex

• LP pairings.
• Liquidity farming.
• Single staking ($ELK).

ElkNet

• Transfer $ELK to/from any ElkNet-connected blockchain.
• No $ELK has even been lost on a cross-chain transfer.
• Ever.

Farm-as-a-Service

• Create liquidity for your project by creating your own permissionless token farms. Read more here: https://elk.finance/farm-as-a-service/ and even more here: https://docs.elk.finance/for-developers/farming-as-a-service-faas
• Live on BitTorrent Chain.
• Avalanche, Fantom and Polygon coming next for FaaS.
• Let us know if you have an urgent need for farms on our other chains so we can prioritize deployment to help your project grow.

Social media and community channel support

• We’re friendly and welcoming
• We support ecosystem projects
• We help where we can

That’s the story right now…

CCTP, cross-chain swaps, Uni v3 and what else?

The next phase for Elk is to take the above, which works (and works well), then add a bit more compatibility, improve the user experience, and make it available to more blockchains. Then we can give more tools for builders to play with ElkNet themselves. You want a bridge? They want a bridge? Everyone wants a bridge! And they’re all allowed to build on ElkNet to make their bridge work.

The existing features and tools will still be available but we will sprinkle the following into the mix too:

ElkDex – Uni v3 Dex

• Customisable LP position NFTs.
• More efficient concentrated v3 liquidity farming.

ElkNet 

• Cross-chain swaps – Choose the token you send to ElkNet and receive any token on a destination chain, again of your choosing.
• Cross-chain swaps powered by $ELK via ElkNet or USDC via Circle’s CCTP.
• No lost $ELK for cross-chain transfers/swaps.
• Ever. (It’s crazy not to stress this point!)

Farm-as-a-Service

• All current self-managed FaaS benefits, but with v3 liquidity.
• More efficient.
• More profitable.
• All in your control.

Social media and community channel support

• We will stay friendly and be here for our chain-agnostic community.

Web3 is Web, we are one tribe, we are Elk: Any chain, any time, anywhere.

Website | App | Docs | Twitter | Telegram | Discord | LinkedIn | Reddit | TikTok | DefiLlama

The post Blockchain expansion: New chains ready to explode onto ElkNet soon  appeared first on Elk.

The Need for Cross-Chain Bridging

The exponential growth of Web3 and DeFi ecosystems has led to the emergence of a multitude of blockchains, each boasting unique features, benefits, and potential. This diversification, while a testament to the innovation driving the blockchain space, also presents a significant challenge: how can we facilitate the seamless, secure, and efficient movement of assets and data across these diverse blockchains?

This question underscores the crucial role that ElkNet plays. As a groundbreaking cross-chain infrastructure framework, ElkNet is transforming how we navigate the intricate maze of the blockchain universe. It provides a secure, frictionless conduit for moving assets and data between decentralized blockchains, laying the foundation for a more integrated and interoperable DeFi ecosystem.

ElkNet: Revolutionizing Cross-Chain Transactions

ElkNet is not your ordinary bridging system. At its core is a novel reservoir system that eliminates the constraints and bottlenecks often associated with cross-chain transfers, such as token availability limitations. With the ElkNet cross-chain bridge, tokens deployed immediately become native on all supported chains. This feature ensures a level of fluidity in asset transfers across blockchains that has been largely unprecedented until now.

ElkNet is secure by design: We’ve built multiple security checks and fail-safes into ElkNet, while including common-sense features like transfer limits and circuit breakers, which will help minimize the damage in the rare case of an exploit attempt.

Unmatched in efficiency: Security, speed, and cost form the three foundational points on the cross-chain triangle. With ElkNet, users get free access to a powerful cross-chain engine – each step in the transfer process has been streamlined without sacrificing security, resulting in fewer overall smart contract interactions.

Our goal is to preserve ElkNet’s status as the fastest and most economical cross-chain bridging option anywhere.

The Benefits of Decentralization

Centralized exchanges and bridges, while providing necessary functions, have inherent limitations and vulnerabilities, including the potential for security breaches and lack of user control. ElkNet addresses these issues head-on by offering self-custodial bridging for projects and users. This approach ensures a high level of security while offering the advantages of decentralization. It’s a move that aligns with the ethos of blockchain technology, where power and control are decentralized and democratized.

Experience the ElkNet Advantage

With ElkNet, moving assets between your favorite blockchains is no longer a complex or daunting task. Instead, it becomes a simple, efficient process that can be completed with a few clicks. The elimination of the usual headaches associated with slow transfers and security concerns allows users to focus more on maximizing their DeFi strategies and less on navigating the technical complexities of cross-chain transactions.

But ElkNet is more than just a tool; it’s a game-changer for the DeFi space. By enabling safer, more accessible, and more efficient interactions within the DeFi ecosystem, ElkNet is playing a key role in shaping the future of decentralized finance.

The ElkNet v2 Beta is live and free for anyone to try out for themselves: https://app.elk.finance/elknet

Join the ElkNet Revolution

Are you ready to experience the next generation of cross-chain bridging? ElkNet is inviting you to unchain your assets and navigate the DeFi space like never before – securely, efficiently, and on your own terms. With ElkNet, you’re not just participating in the DeFi space; you’re actively shaping it.

Embark on your journey with ElkNet now and be part of the movement that’s making Web3 more accessible to all. The future of DeFi is here, and it’s spelled E-L-K-N-E-T. Don’t get left behind in this revolution.

The post ElkNet: Unleashing the Power of Cross-Chain Bridging appeared first on Elk.

In the vast universe of blockchain and cryptocurrency, cross-chain bridges play a significant role, acting as intermediaries that enable seamless cryptocurrency transactions across different blockchain networks. With the growing demand for interoperability in the decentralized world, the need for efficient cross-chain bridge services has become more prevalent.

What is a Cross-Chain Bridge?

A cross-chain bridge allows the exchange of information, cryptocurrency, or non-fungible tokens (NFTs) from one blockchain network to another, thereby facilitating the flow of data and tokens across what would otherwise be isolated data sets on different blockchains​¹​.

In contrast to traditional fiat currency exchange systems, cross-chain bridges provide a more efficient and less costly way to exchange different cryptocurrencies. Instead of converting cryptocurrency into fiat currency, which often involves fees and time, a cross-chain bridge allows users to directly exchange one cryptocurrency for another.

How Cross-Chain Bridges Work

Cross-chain bridges employ several mechanisms to facilitate transfers between different blockchain networks. One common approach is the use of wrapped tokens, where the value of one token from a specific blockchain network is encapsulated inside another token. For instance, Wrapped Bitcoin (WBTC) is a Bitcoin token wrapped with an ERC-20 Ethereum smart contract, enabling Bitcoin to be used in Ethereum-based blockchains​¹​.

Another method involves a liquidity pool, where a cross-chain bridge provider holds an inventory of various coins that can be exchanged for one another.

Popular Cross-Chain Bridges

Celer cBridge

The Celer cBridge uses the Celer State Guardian Network to enable liquidity across different blockchains. It supports numerous blockchain networks such as Ethereum, Astar Network, BNB Chain, Avalanche, Polygon, Arbitrum, and more. It also supports a wide range of cryptocurrency tokens like Tether, USD Coin, Ethereum, and others​¹​.

However, when discussing cross-chain bridges, it’s crucial to highlight an emerging player that’s demonstrating a superior approach to cross-chain interoperability: Elk.

Elk Finance’s ElkNet

Elk Finance’s ElkNet is a cross-chain infrastructure framework that allows for the movement of assets and data between decentralized blockchains. It provides self-custodial bridging for projects and users. The heart of the ElkNet solution is a novel reservoir system that eliminates fragmentation and token availability limitations that can hinder cross-chain transfers. Tokens deployed on the ElkNet immediately become native on supported chains​²​.

ElkNet not only offers services for individuals but also for businesses. Individuals can move their assets between blockchains securely, fast, and efficiently. Elk also offers liquidity mining where ELK tokens are distributed through liquidity farming on ElkDEX and impermanent loss protection is provided for *most* ELK pairs​²​.

For businesses, ElkNet’s Bridging-as-a-Service allows protocols to create self-managed bridges with all the benefits and security of ElkNet. Additionally, Elk has “Farming-as-a-Service” where projects can deploy their own liquidity farms. A noteworthy feature of Elk Finance is its insurance fund where 10 million ELK tokens are held in reserve in case of an attack or exploit, further enhancing its security​²​.

Elk Finance’s mission is to build the most powerful and convenient interoperability network for Web3, with a vision of making Web3 accessible to all and integrated within the future internet. We place a high emphasis on safety and simplicity for the end-user.​²​.

Multichain

Multichain, known for its bridge technology that facilitates asset transfers across different blockchain networks, experienced operational disruptions due to unforeseen issues and the unanticipated absence of its CEO, Zhaojun. The issues affected the cross-chain service of several chains and stirred rumors within the cryptocurrency community. The incident resulted in a substantial decline in the value of MULTi, Multichain’s native token. Despite the concerns, the Fantom Foundation assured that the situation had no impact on its assets and bridging​¹​.

Security Considerations

While cross-chain bridges offer several benefits, they also come with security risks. Cyber threats and attacks have targeted cross-chain bridges, leading to substantial losses. Therefore, it’s vital to choose secure and reputable cross-chain bridge services to ensure the safety of your assets​¹​.

ElkNet and Cross-Chain Bridges

Elk Finance is a notable player in the realm of cross-chain bridges. It utilizes the innovative ElkNet technology to offer a secure and efficient cross-chain bridging service. Through ElkNet, Elk Finance moves assets and data between decentralized blockchains and provides self-custodial bridging for projects and users​²​.

Elk Finance not only facilitates the transfer of assets across different blockchains but also offers additional services like liquidity mining and impermanent loss protection, making it an appealing platform for both individuals and businesses​²​.

Conclusion

Cross-chain bridges are undoubtedly crucial in the world of blockchain, enhancing the interoperability of different networks and making cryptocurrency transactions more efficient. Elk Finance, with its innovative ElkNet technology, stands as a testament to the advantages of cross-chain bridges, offering users a secure, efficient, and comprehensive DeFi platform. Try Elk Finance’s cross-chain bridge service today and experience seamless cryptocurrency transactions like never before.

The post Understanding Cross-Chain Bridges: Your Key to Seamless Cryptocurrency Transactions appeared first on Elk.

The fact is, for most of our early users, Elk is a bridge project. People tend to discover Elk after hearing about a new Ethereum challenger or a token launch on an unfamiliar chain. Once they find us, they hopefully learn what many already know, which is that our cross-chain value transfer protocol (yes, OK, the bridge) is one of the most convenient ways to get funds from Chain A to Chain B.

In this way, Elk performs its core bridging function well, bringing crucial infrastructure to the rapidly growing realm of decentralized finance. But here’s the thing: bridges are boring. Not only that, they are some of the worst investments in the history of the world. From Ancient Rome to the San Francisco Bay, bridges have played a vital role in the progress of civilization, but at the end of the day, all those feats of engineering and upkeep typically end up benefiting what lies on either side.

In this article, I will briefly lay out the case for why the Elk network should be seen less as a bridge and more as a multi-functional DeFi gateway. I will start by describing ElkNet in its present form and the utility of the ELK token, before moving on to explain two forthcoming upgrades that demonstrate Elk’s broad vision for the future of multi-chain DeFi. These are:

• CHFT, a multi-chain native stablecoin
• Proxy tokens, cross-chain virtual assets

The Elk blockchain, with ElkNet at the center, is designed to overcome the current limitations of existing bridges and blockchain interoperability more generally. In short, the three main problems are:

• The Bridge Fragmentation Problem
• The Exit Liquidity Problem
• The Interchain Messaging Problem

Let’s take a look at each one in order…

The Bridge Fragmentation Problem

As new chains and projects scramble to capture market share from existing networks, proprietary bridging solutions have given rise to dozens of individually wrapped bridge tokens based on the same underlying asset. This in turn has resulted in widespread liquidity fragmentation, since two different wrapped tokens based on identical assets become incompatible once they arrive at their destination. This creates confusion and stunts growth by producing thin liquidity pools with artificially high price impacts for traders.

The Exit Liquidity Problem

Conventional bridges operate through a simple lock-and-release mechanism: to bridge USDC from Chain A to Chain B, a user initiates a transfer by locking USDC tokens into a smart contract on Chain A, which then tells a contract on Chain B to release the same number of USDC tokens. The fundamental problem with this model, however, is that there needs to be enough tokens already locked on the destination chain (Chain B) to complete the transfer. If there are not enough tokens — which is a fairly common occurrence — the transfer fails, and the bridge becomes unusable.

There are ways to minimize the exit liquidity problem, such as bootstrapping a bridge with exit liquidity furnished by the protocol or restricting the amount of tokens that can be transferred. As we’ve seen, however, liquidity can still dry up during mass migration events, which tend to be exactly when bridges are in highest demand.

The Interchain Messaging Problem

This one is less of a problem for DeFi as it currently exists, but it is central to realizing the vision of a multi-chain future. The radical promise of programmable cryptocurrencies like ERC-20 tokens is that they carry data parcels, which transforms them into stores of data as well as value. This opens up a whole universe of potential applications that form the basis of what we now refer to as web3.

The problem, however, is that relaying information that exists on one chain to another chain is currently a slow and highly inefficient process. Current solutions are often a patchwork of systems involving subgraphs, oracles, proprietary APIs, etc. that primarily reside outside of the blockchain. Today, there is no simple solution to relay information between chains, yet such cross-chain messaging is key for creating truly interoperable blockchain applications.

The Elk network provides elegant solutions to overcome each of these problems, while simultaneously unlocking new use cases that leverage ElkNet’s unique cross-chain architecture.

ElkNet & The ELK Token

ELK is Elk’s native settlement currency. Unlike conventional bridges, ELK is the only token that moves across ElkNet, which connects the Elk network to every network Elk supports (as of this writing: Avalanche, Polygon, Fantom, Huobi ECO, xDai, and Binance Smart Chain).

All liquidity pools on our multi-chain exchange, ElkDex (app.elk.finance), are bonded to ELK. The structural advantage of this approach is that traders are able to transfer funds between chains by swapping their tokens for ELK, migrating over the bridge, and exchanging them at their destination for tokens of their choosing. Cross-chain swaps automate this process, allowing users to trade arbitrary tokens, which are seamlessly exchanged for ELK under the hood.

This model has multiple advantages: since there are no wrappers or bridge tokens involved, there is no fragmentation introduced. Users can of course swap their tokens for an existing bridge token, but ElkNet does not add to the fragmentation problem by introducing new tokens. This is why Elk is best described as a “value transfer” protocol: it is designed to bridge value, not tokens (other than, of course, ELK).

ElkNet also solves the exit liquidity problem. Since ELK moves freely over the Elk network, which functions as a storehouse for ELK, exit liquidity is by definition never an issue. ELK is always be transferred in a perfect 1:1 ratio; One ELK goes in, one ELK comes out.

ElkNet also provides an original solution to the interchain messaging problem, since it has a data relayer function built into it. In the future, developers will be able to leverage ElkNet to make calls for information stored on multiple chains, transforming the landscape for cross-chain interoperability and paving the way for genuine multi-chain dApps and smart contracts. In this way, you can think of ElkNet as a kind of DeFi switchboard, automatically routing calls between multiple networks on demand.

One theoretical drawback of using ELK as a medium for value transfers is that price impact (slippage) for transfers can be high if there is not sufficient liquidity to facilitate the conversion to ELK tokens during a cross-chain swap. This is the main tradeoff for solving the exit liquidity problem, and it is the reason that pairs on ElkDex are always bonded to ELK.

Ensuring that pools have depth across all chains is therefore key to making the Elk blockchain function. ElkNet is also able to interface with other network AMMs, applying a “smart order routing” algorithm to find the most efficient trade path for the tokens on either end. Using DEX aggregation, users will be able to swap any token they wish with minimal price impact.

Since ELK is not a pegged token, its price can deviate across networks, resulting in potential price disparities during cross-chain transfers. As many in our community have already discovered, however, this “problem” also presents an arbitrage opportunity, such that bridging can actually result in net profit in some cases. As Elk grows, price arbitrage will surely become more sophisticated, ensuring relative price parity across all chains.

Of course, many traders would prefer to avoid any price differential as they moving between chains. With this in mind, we are preparing to release a stablecoin designed to interact with ElkNet.

CHFT, A Multi-chain Native Stablecoin

CHFT will be the first cross-chain stablecoin based on an innovative “gyroscopic” design, which allows it to be minted natively on any network that Elk supports. Like the ELK token, CHFT will carry the same token address across all chains compatible with the Ethereum VM (EVM) and unique addresses on non-EVM chains, thereby reducing fragmentation and bypassing the need for custom wrappers.

The price of CHFT will be pegged to the Swiss Franc (CHF), which is widely regarded as one the world’s most stable currencies. Users will be able to mint CHFT by using various whitelisted tokens as collateral. CHFT tokens will be overcollateralized, meaning that users are required to deposit tokens whose value exceeds the amount of CHFT minted based on a collateral factor assigned to the token being used as collateral.

This design follows the most common method for issuing stablecoins collateralized with cryptocurrency. Once CHFT has been minted, however, users can be freely move to any chain to any chain via ElkNet at a stable 1:1 ratio, where it can be traded, pooled, or farmed. CHFT can subsequently be redeemed for collateral locked on any chain. In the unlikely event that there is no collateral available for redemption on a specified chain, users can simply move CHFT to another chain where collateral is available. Since CHFT is overcollateralized, there is little risk of liquidation, and there is guaranteed to be exit liquidity available.

Proxy Tokens: Cross-chain Virtual Assets

While ElkNet addresses the problem of bridge fragmentation, the very existence of bridge tokens demonstrates a broad-based desire among DeFi users to trade, provision liquidity, and farm for yield using assets that are currently segmented across dozens of networks. Our proxy token concept offers a practical solution to the bridge fragmentation problem by decoupling a token from its underlying asset, liberating it to move among networks in a similar fashion as ELK or CHFT.

In this case, users will be able to mint proxy tokens by locking the asset they wish to convert into a proxy token along with a small amount of ELK. Unlike CHFT, proxy tokens are issued in a perfect 1:1 ratio, and it can be redeemed for the underlying asset at any point.

Proxy tokens offer a solution to the exit liquidity problem since they are converted into a virtual asset on their chain of origin (similar to a wrapped token), meaning that no exit liquidity is required on the destination chain. Unlike a conventional wrapped token, however, proxy tokens can move across ElkNet onto any network, where they can be traded or used to farm with that network’s native tokens.

The possibilities of proxy tokens are endless, and doubtless the community will discover their uses in time. One clear application will be to bring popular tokens, including ones that exist on non-EVM chains, onto the networks that Elk supports. Another exciting potential involves multi-chain dApps, where the supply for a token can exist on a single chain, and proxies can be used to deploy on multiple chains without fragmenting supply.

Elk plans to release an SDK for developers in the near future, which combined with proxy tokens will open up all sorts of possibilities for cross-chain applications. Since ElkNet serves as an on-demand messaging switchboard, the potential for novel cross-chain interoperable smart contracts and applications truly has no bounds.

Ultimately, these are just a few of the potential use cases for the Elk network. We’ve only started to imagine all of the ways that each will be used, and we are excited to see what novel concepts the community invents for them. Together, they demonstrate how Elk is much more than a mere bridge; it is a true DeFi gateway.

The post Beyond The Bridge: Exploring Use Cases for the Elk Network appeared first on Elk.