Announcing Elysian Finance

Introduction

The DeFi industry has seen incredible growth since its inception and shows no signs of recession. The premise of freedom from the traditional financial system as well as the ability to earn passive income attract people from all around the globe.

Maker was one of the first players of this industry with the introduction of the DAI “stablecoin” and CDP, which stands for “collateralized debt position”. A CDP typically involves users depositing ETH or other tokens, to obtain a loan denominated in the DAI stablecoin, purposely designed to track the US Dollar. Maker controls the stability of DAI’s 1:1 peg with the US Dollar by manipulating demand and supply through loans interest rates.

The concept of collateral backed debt, inherited from classic finance, is central to the development of the industry. Synthetix, a derivative asset emission protocol, laid ground breaking work by extending the model with the introduction of the “global debt pool”. In this model, users stake SNX tokens in the pool to mint synths, which mirror cryptocurrencies and real-world assets. This process creates debt, which fluctuates with the market prices of the assets minted. Debt is shared across participants, proportionally to their initial share of the pool.

The introduction of “bonding curves” and development of “automated market makers” (AMM) such as Bancor Network and Uniswap, is another pivotal point in DeFi’s short but dense history. AMM protocols eliminate the need of mutual presence of parties for a trade: only one of the two parties is required as users trade directly into the liquidity of the smart contract. In this model, liquidity providers add funds in change for a portion of the exchange fees generated by trades and a carefully designed bonding curve is used to let buyers and sellers tap into the liquidity, penalizing them if they exhaust it.

As AMM protocols grew in popularity, projects increasingly relied on them and sought ways to increase liquidity in their pools. This contributed to the popularization of “liquidity mining”, i.e. projects offer rewards, usually denominated in their own token, to users that provide liquidity for them.

The explosion of the ecosystem led to increasing interoperability between protocols as they become the building blocks for the new financial system. Widespread adoption of trust-less design and the DAO’s (Digital Autonomous Organization) philosophy, led to many projects relinquishing control over their own infrastructure to a decentralized party, composed by users and stakeholders holding “governance tokens”. Beside voting on proposals, this type of token is used by projects to further incentive liquidity provisioning and other activities. From the user perspective, the practice of combining interoperable protocols and engaging in activities such as staking and liquidity mining is called “yield farming”.

More recent ideas led to experimentation with the concept of algorithmic stablecoins and rebase tokens. Projects such as Ampleforth and Olympus DAO are among the most prominent players. Algorithmic stablecoins are not based on debt and collateral, but seek to stabilize their price by automatically balancing the supply and demand of the asset in circulation. Olympus DAO is technically not a stablecoin, but it is responsible for the issuance and management of a fully backed, algorithmic, free-floating stable asset (OHM).

A lot has been written about this ambitious project and its success is testified by the abundance of more or less serious copy-cats, trying to capitalize on the idea. To learn more about the protocol inner workings, we recommend to read the excellent Olympus documentation.

Elysian Finance

Elysian Finance (LYS) aims to bring fresh air to the current status-quo with an original project, deeply inspired by OHM but with a unique approach to system design. Our contribution brings upgradeability (EIP-1822 proxy pattern) and modularity to the smart contract architecture, as well as additional features such as:

• OTC market for bonds and inverse bonds
• Protocol automation
• On-chain governance and NFTs.

We maintain the most important characteristics, such as as risk-free-value (RFV), protocol owned liquidity (POL) and compounded returns and we introduce a second tier of staking rewards, on top of a ve(3,3) “vote-escrow” mechanism. The project is in active development and we are heading to launch in early Q2 2022.

Bootstrap phase

The project is at this stage mostly self-bootstrapped and the team spent a large amount of time and effort to reach the current development state. The smart contract code is 80% completed and a full fledged front-end is in the works. Although we are standing on the shoulders of giants, a lot of work is still required to launch a safe protocol. Smart contracts audit and legal opinions are expensive and a fair launch depends on a number of factors that cannot always be foreseen. This is one of the reasons why we are holding a private seed round ahead of the fair launch event. The goal in this round is to bring in like-minded individuals and investors whose contributions can be pivotal to the future of the protocol. The fair launch event focus will be to bootstrap initial liquidity, while at the same time giving everyone an opportunity to join early.

Distribution mechanism

The upcoming round will see the distribution of Pre-Elysian (pLYS), a derivative of LYS with a option inspired behavior.

Because the intrinsic value of LYS in the treasury is $1, for every LYS minted there must be $1 in the reserve.

Holding pLYS gives the right to mint LYS by burning 1 pLYS and depositing $1 worth of a reserve asset for each token minted.

Since pLYS vests based on supply, it is a long term bet and there are no specific dates at which the circulating is arbitrarily inflated. The behavior of pLYS resembles an option because it only makes sense to redeem it when LYS is trading above its intrinsic value.

Early supporters, advisors and team will be able to cumulatively vest their pLYS when the supply reaches 12%. This means that when the supply is at 1m there will be 120k reedemable pLYS, at 10m supply, it will be 1.20m pLYS and so on.

Here is a breakdown of pLYS distribution:

• Team: 330m pLYS and 8% supply
• Investors: 70m pLYS and 3% supply
• Advisors: 50m pLYS and 1% supply
• Community: 550m pLYS and no supply cap.

Proceeds of the distribution will be used to fund development and scaling demands, as well as marketing and product development. Overall, the goal of this round is to obtain the resources needed to support the project medium to long-term, without having to access treasury funds through governance proposals. This will guarantee that the initial phase focus will be growth and user base expansion. Join the whitelist to receive a full prospect or send us an email at info@elysian.finance to request specific information.

Whitelist

In order to participate in the Pre-Elysian distribution you will need to be whitelisted first. You can apply for whitelist on our official website. Please note that seats are numbered and we will stop accepting applications when they are exhausted.

The team

We are a team of computer science enthusiasts working at the intersection of finance and cryptography. Our previous experiences range from distributed systems and trust-less architecture to smart contracts and network security. The team’s goal is to enrich the ecosystem and positively contribute to this industry. We plan to achieve this by innovating and careful management of human and financial resources.

Elysian Finance

Twitter | Github | Discord| Telegram

https://elysian.finance | info@elysian.finance

Legal Disclaimer

The information provided in this Medium Post pertaining to Elysian Finance. (Elysian Finance or the “Company”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this Medium Post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This Medium Post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. Elysian Finance and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and Elysian Finance expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. Elysian Finance reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this Medium Post supersedes any prior Medium Post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither Elysian Finance nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this Medium Post by you or any of your representatives or for omissions from the information in this Medium Post. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this Medium Post.