Elrond DeFi 2.0: The Era Of Autonomous Banking, A 100-Trillion Dollar Opportunity

Beniamin Mincu
·
Mar 01, 2021
·
6 min read

Technological advancements have shaped our world into something that was presumably beyond what we imagined to be possible only a few years ago. From shipping in one day around the globe, to instantly sending and receiving emails, calls, videos,  anytime, anywhere, to reaching a point where we are solving complex problems in milliseconds.

The financial system, however, has remained surprisingly stuck in the past, with its core elements being extremely inefficient. The brokenness can be viewed in the fact that in the high-speed internet era you still wait days for transactions to process, pay large fees for processing, have different payments for different countries, and have days with closed schedules.

Perhaps most painful is the fact that more than 1.7 billion people still lack basic financial infrastructure in the world we live in today. Being confined to a daily struggle for food and minimal subsistence necessities, without the capability of exchanging, storing, and saving some of the value created for the next day, reinforces a vicious cycle.

Herein lays by far the largest opportunity and imperative for improvement.
Largest in both impact: number of people touched, and upside: quantity of new value created.
This may be perhaps the biggest opportunity since the invention of the internet.

By adopting blockchain technology as a financial settlement layer, states, banks, businesses, startups, and individual users around the world, will be able to benefit from faster and significantly cheaper financial services, gaining orders of magnitude in efficiency while exploring new tools for value creation. Connecting the rest of the unbanked world to this new economic efficiency via the internet will be the most effective step to offering them and their families the chance to a better life, and the means to forge a better future.

Foundation Blocks For The New Economy

But in order for blockchain to be widely adopted and become the fundamental settlement layer for the global economy, it must meet certain necessary criteria: (i) It must be able to operate at internet scale from a performance standpoint, (ii) it must be globally accessible, (iii) and it must offer simple enough user experience. Without these non-negotiable criteria met, blockchains will be like the early version of the internet, only without the invention of a browser and stuck with a dialup connection.

This is why Elrond’s goal has been to (a) build the backbone for a high bandwidth, low latency, transparent financial system, (b) decentralized in nature, and (c) accessible to anyone anywhere.

The fact that the Elrond network is live, capable of processing hundreds of thousands of transactions per second, with a $0.001 transaction cost, and a 6 sec latency, is crucial, and equally so is the intuitive simplicity of the Maiar app. Together, the deep vertical integration of the Elrond network and Maiar app, open a new adoption path for the next billion people that are about to join.

Built on top, Elrond’s DeFi 2.0 module reimagines banking. By unbundling its components and leveraging blockchain technology, we can offer a much simpler digital solution for each of the problems tackled, completely automating the process.

Generalizing such a solution, and offering it at internet scale, means these financial services would be near-instant, inexpensive, programmable, and decentralized. Making them accessible to anyone anywhere via a mobile app, is the natural step forward.

This is the era of Autonomous Banking.

ESDT Stablecoins

Stablecoins are tokens whose value is pegged to a fiat currency such as USD, or other assets.

They are the simplest and most effective first step for integrating blockchain utility in the traditional financial system, enabling immediate benefits, and using recognizable denominations while providing a smooth transition for traditional finance actors.

The Elrond ecosystem includes many stablecoins such as Binance USD, European stablecoins such as EUR, CHF, SEK, NOK and DKK, or algorithmic stablecoins from our many partners. Each of them will be coming live soon, with more to follow.

Elrond NFT Standard

Non-fungible tokens are the purest digital representations of property, extending art, collectibles, game items that are unique. NFTs will reshape the media space, providing true ownership for digital media objects.

NFT experiments by artists and creators from around the world will bring an unprecedented cultural shift and excitement, underscoring one of blockchain's important killer applications, and driving adoption to the mainstream. NFT applicability extends beyond art, spanning fields ranging from finance to gaming, entertainment, and more.

Elrond has designed a native NFT standard, to leverage its throughput and speed, making these features usable at internet scale. The Elrond NFT standard will also feature a built-in royalty fee.

Elrond Launchpad

The Launchpad module enables new projects to bring the most innovative and creative ideas to market, getting funding and launching directly within the Elrond ecosystem.

Technical advantages of the Elrond mainnet and the unique properties of eGold tokens, coupled with our vibrant DeFi ecosystem and one of the most passionate communities in the space, will set the stage for perhaps the most effective Launchpads in the blockchain space.

Elrond Swap

AMMs are an important breakthrough adding orders of efficiency to market liquidity.
Elrond will soon have its own AMM, enabling swapping between any assets, at near-instant speeds and inexpensive cost.

This will enable value to seamlessly flow between various tokens, stable coins, and synthetics.
Extending this at the internet-scale will bring a maturation phase for both digital assets and their deep liquidity.

Through the Elrond swap module, anyone will be able to provide liquidity in pools to generate yield for their service.

Elrond Lending

Borrowing and lending are fundamental cornerstones of an efficient financial system.

The lending module will provide automatic, easy, and instant access to liquid capital, either collateralized by token holdings or via other mechanisms.

This will open a new more efficient global debt market, effectively matching borrowers with lenders in an automatic fashion. Global users will have the opportunity to get fast and inexpensive access to funds via borrowing while enabling others to lend their capital and generate yield for doing so.

Elrond Synthetics

Synthetic assets are tokenized financial instruments that simulate another asset’s payoff.

Tokenization is rapidly growing as a trend beyond finance, enabling a very efficient process by which any asset can receive a digital representation, fractional ownership and granularity, easy transferability, depth of liquidity, and global distribution and accessibility.

Everything from tokenized Tesla stocks, to commodities, will become available to be swapped or collateralized against, via the Elrond synthetics module.

Elrond Bridges

Elrond is a highly interoperable blockchain. It is already connected to several chains, with others to follow soon via bridges.

Bridges enable any tokens from one chain, to move to the other, and will soon enable smart contracts on one blockchain, to interact with smart contracts on another.

Simply put, through the Elrond bridges, you will be able to own and transfer wrapped Bitcoin, Ethereum, or any other tokens from other chains, in a similar way you transfer native tokens on the Elrond mainnet.

The bridge module will enable global liquidity to flow seamlessly through the Elrond Network, granting any project the opportunity to leverage Elrond's high throughput, low costs transactions, and compelling user experience.

Mechanics Of DeFi Hypergrowth

Each DeFi component can be seen as an economic engine in its own right. Each tackling a hard trillion dollar problem of global significance. Thus, when put together, they form a digital flywheel enabling unprecedented economic growth.

All of them are being built anew on Elrond. All by independent heterogeneous teams acting in concert as part of a global consensus mechanism. All powered by the eGold native currency.  All using Elrond’s native throughput and inexpensiveness, coupled with Maiar’s intuitive simplicity, to unlock a set of new markets, at scale.

By onboarding the next billion people to this new economy, we will give birth to a 100-trillion-dollar market opportunity.

During the next few days, the designs for each module, with their economic models and implications will be unveiled. The first module will go live on hypergrowth day 95, with each subsequent module to follow roughly two months after. With each new DeFI engine set in motion, Elrond’s growth will shift up a gear.

Swaps, lending, launchpad, synthetics, NFTs, ESDTs, stablecoins and bridges.
Working automatically, near-instantly, inexpensively, at global scale.
Usable by nations, banks, businesses, startups or private individuals.
Permissionless, decentralized, open source.
Accessible to anyone, anywhere.

This is the Elrond DeFi 2.0 module, and it's about to come live.
The era of Autonomous Banking is here.


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Written by
Beniamin Mincu
CEO, Elrond Network