Introduction

EXECUTIVE SUMMARY

ELEMENT is an optimized liability-centric single-sided DeFi 2.0 protocol designed to serve as a capital-efficient Automated Market Maker for stablecoins on the Algorand blockchain. Unlike DeFi 1.0 decentralized exchanges, ELEMENT introduces liability centric model to eliminate the liquidity pair concept to the Stable AMM technology to reduce impermanent loss risks to a bare minimum, thus increasing capital efficiency.

VISION

Despite the uniqueness and vibrancy of Algorand Blockchain, the ecosystem lacks a reliable, Stable Swap with the necessary features to serve the future of finance. Exchanges in the current Algorand ecosystem are susceptible to various weaknesses that hinder the delivery of excellent user experiences. For example, businesses that leverage automated market-making are prone to liquidity fragmentation due to a closed liquidity pool structure. DeFi 1.0 exchange models are susceptible to slippages, capital inefficiency, and lower scalability due to the invariant curve mechanism and deficiency of multi-assets integration. ELEMENT intends to address the deficits of the Algorand ecosystem by designing a StableSwap with deep liquidity including lower slippage, higher scalability, and better user experience. These features will mitigate top challenges in the crypto industry, creating a pathway to the transformation of DeFi 2.0. Successful deployment of ELEMENT StableSwap will cater to the long-term progression of growth in the Algorand ecosystem as a more compelling and capital-efficient decentralized exchange for stablecoins than its competitors.