The Founder Fireside Chat series hosted by DeFi Pulse interviews DeFi founders in the hopes of offering readers an opportunity to better understand their perspective and what drives them to build their vision.

This week we’re joined by Will Villanueva Co-founder of Element Finance, an open source protocol for fixed and variable yield markets.

What are you building and what sets it apart from similar offerings in the space?

At Element, we’ve built a fixed rate protocol that acts as a foundation for many future financial products to be built that don’t exist yet in traditional finance or DeFi.

Users can take a position offering some aspect of growth, such as yield, and split their position into the principal (initial investment) and the growth (the yield). With these two primitives, they can participate in markets that trade the principal as fixed income and the yield as a variable interest primitive. These combined pieces allow for users to go long or short on yield rates in the market and allow for the market to organically set the fixed and expected variable rates during varying terms of 3-9 months. The fixed rate instruments essentially trade similar to high rate CDs which can be sold at any time to other users.

The cool part, however, is that this paradigm can be applied to more than just yield positions in DeFi. This splitting mechanism can be a part of anything that experiences growth. We’ve recently explored applications in play to earn gaming or other areas such as NFT ownership/fractionalization.

Which quality of the Scalability Trilemma do you find to be the most important?

Security, then decentralization, then scaling. In my experience as a protocol researcher, I’ve experienced first hand time and time again how security issues can kill even the best protocols. Decentralization drives what we do, so this is the next most important. As technology and research advances, scalability can continue to be iterated on while maintaining decentralization.

What is the most critical part of forming a lasting community?

Figure out what type of community and what type of people you want to attract. In our case, we released deeply technical research and simulations first. We then broke these down into simpler ideas that could be shared and digested. We’ve been fortunate that this approach has given us a very thoughtful, thorough and innovative community. I’m really proud of the discussions we have seen.

What is something in DeFi that you think more people should be paying attention to?

Expanding the concepts we’re exploring and building into areas that don’t just represent financial concepts. The merging of DeFi, gaming, NFTs, governance and social systems is a great example. We’re all treading new waters and this is incredibly fun.

What is a critical lesson you have learned on your journey?

Be open to sharing your progress, concepts, and ideas with anyone who is interested instead of being secretive with the work going on behind the scenes. Further on that point, being open to having your hypotheses validated or invalidated when you launch and try something, then adapt. This market moves fast and because of that it’s so important to share early and often, try new things, and experiment. When you do this, you might just stumble on something you never expected. 🙂


Thank you for reading! And thank you to Will for chatting with us.

Learn more about Element Finance and follow them on Twitter.