Lodge Letter #51

Elastos and Elk came together for an AMA this week. The markets maintain a ranging status. The USA reports a record inflation rate, while the dollar dominates other national currencies.

Looking at the global markets right now is nosebleed-inducing. But the main economic headlines have centered on the rising CPI in the US and the ever-strengthening dollar. Will the Federal Reserve interest rate be hiked again? We have to wait and see. Bitcoin’s price reacted negatively to the CPI news but quickly climbed back to ~20k, about the middle of the range it’s sat in since mid-June. The stock markets? Not so good. The Dow Jones slid 200 points on the CPI news. And crypto is volatile? Crypto doesn’t sleep, it endures.

Yes, it’s a tumultuous time. And yes, there will be incredible schadenfreude published about crypto in times like these, and about DeFi and Web3. Usually this vitriol is written by those invested in the traditional status quo, or just by those who don’t wish to understand, or just can’t understand a bigger future in play. A decentralized, data- and asset-sovereignty future, without reliance on the few. A digital data and wealth revolution.

Blockchain is seen by its advocates as the means to bring this about. The exact manner of how this will be realized is unknown, but the desire and the belief is there. And the support is growing, not diminishing.

The code to a more transparent financial landscape is being written, the movement is alive, and Elk will be helping to move the data, and the wealth, to where the owners want it to be. Not controlled by governments, or conglomerates, but by the people.

Elastos and Elk combine

On Monday 11th July, Elk’s Snake Plissken had the honor of welcoming a Web3 OG into a Twitter Spaces event; where Elastos’ founder, Rong Chen, discussed the history of Elastos and the importance of owning your own data through DIDs, P2P data carriers and storing it on P2P Hives — all secured by the blockchain.

In fact, as Elastos’ Mainchain merge-mines with BTC, the security of >50% of BTC’s hashpower on a DID is a pretty significant tick in the data ownership and safety box!

Also in attendance were prominent Elastos Smart Chain ecosystem projects:

• Glide Finance — DEX
• FilDA — Lending and Borrowing
• CreDA — Crypto Credit Scores for Web3
• Elacity — A Decentralized Marketplace (NFTs, for now…)
• Cyber Republic — The Elastos DAO

It’s a great discussion about DeFi from Glide and FilDA, how the Elastos DAO works, what Elacity are concocting with their platform, the innovation of Credit Scoring for Web3 and an introduction to how Elastos is bringing the concept of a Smartweb to fruition.

The AMA was recorded and can be heard in full here: https://twitter.com/i/spaces/1MnxnkkAXeLKO

Bridging-as-a-Service (BaaS) — What could you do with it?

Case Study 1: Governance

At the simplest level your project may have a product, a DEX perhaps, that wishes to branch into another chain. If both chains are EVM compatible then adjusting your contracts to work on the new chain would likely be rather simple. Bringing your community to a new chain is also something well within the grasp of a committed development team with loyal followers and users.

But what if the governance of your protocol relies on token holders staking on chain A’s governance contracts? How can holders of the token on chain B join in to find consensus for changes, even though they hold the governance token?

• Solution A — Build a bridge yourself. But bridges get exploited so do you want to risk it?
• Solution B — Pay (a lot) for a bridge. It really isn’t cheap.
• Solution C — Not really a solution, but maybe it’s just tough luck for the non-governance chain holders. No vote for them.
• Solution D — Multiple governance structures? Sounds awkward.
• Solution Elk — Use the cross-chain ElkNet to build your own bridge using our BaaS SDK.

Leverage the tools and mechanisms now proved, over the last year, to be safe, fast and cost-efficient, to make a bridge to move your token back and forth between as many of Elk’s connected chains as you wish.

But how does Elk benefit from this? Why is Elk providing BaaS at all, just to sell bridge space and line your own Elky pockets?! No thanks. That’s not for us.

ElkNet is going to be decentralized, with governance for a Web3 bridge, by Web3 users. The vision and ethos behind Elk is to:

• Make a cool and safe solution to a growing problem.
• Make an ecosystem that is self-sustaining and profitable for contributors.
• Make it easy for users and other protocols to move through Web3 spaces.

To this end, each ElkNet transfer incurs fees in the token being bridged. These fees are a tiny percentage of the overall transaction; very competitive with current bridging solutions available now. We feel this is reasonable because a service is being provided, expenses are incurred, and users are benefiting from an efficient bridge.

Fees, incentives, and rewards are part of the DeFi and Web3 world. Owning data, owning assets, and transferring them through decentralized pathways for a small fee has to be better than paying a large fee to a bank for losing control of your data and wealth sovereignty.

It is the intention that fees are paid to:

• Node validators — for maintaining the decentralized ElkNet.
• ElkLabs — gas costs, operations, marketing, business development, etc.
• Protocol owned liquidity — maintaining ElkDEX viability for cross-chain swaps.

There will also be a competitive fee payable for “ElkNet access”. Again, this will be significantly cheaper than existing bridging options, and without the centralized aspect of other bridges.

What could an ElkNet bridge provide to your favorite protocol? Let us know in the comments.