The Element Protocol claims to bring high fixed rate yields to DeFi while maximizing capital efficiency, creating market liquidity, and reducing user costs. Element protocol users will be able to purchase BTC, ETH, and USDC at a discount without being locked into a fixed term, allowing easy swapping between the discounted asset and any other base asset at any time.
The Element Protocol, at its core, works by splitting the base asset positions (ETH, BTC, USDC) into two distinct separate tokens, the principal token, and the yield token. This splitting mechanism allows users to sell their principal as a fixed-rate income position, further leveraging or increasing exposure to interest without any liquidation risk.
Element will be a community governed protocol. Element has a strong team but it is in early stages of development. The project has very little activity on public Github and the amount of technical details is limited, so we are not able to provide a proper technical review. This is a project we will keep a close eye on as things evolved.