Eleven Finance Review

What is Eleven Finance?

Eleven Finance is a cross-chain auto-compounder, lending, and yield farming protocol that optimizes vault returns. The platform was launched in March 2021 on Binance Smart Chain and then expanded to EVM compatible blockchains such as Avalanche, Fantom, Polygon, and OECnetwork. 

The goal of the Eleven Finance platform is to optimize yield returns and automate the farming process.

How does Eleven Finance work?

By contributing liquidity to numerous platforms across several blockchains, Eleven Finance users receive LP (liquidity provider) tokens, which they can deposit into one of the platform's vaults. These vaults generate high returns by automatically harvesting rewards in the form of underlying assets, selling them, and re-purchasing more LP tokens, after which the process repeats. This means that the vaults operate on a compound interest strategy, which leads to exponential asset growth over the long term, providing optimal returns for their users. 

If we take the CAKE-WBNB LP vault as an example, when the harvest function is called, the platform contract will take all the pending CAKE rewards, sell 50% of them, buy BNB with this amount and generate more LPs, then re-add them to the total number of CAKE-WBNB LPs in the Eleven Finance vault. These newly gained LPs are shared proportionally to everyone in the pool —  except for a 2.2% performance fee on these rewards. 

The performance fee is split between the repurchase of ELE tokens which are then distributed among the platform users, the controller fees to enable harvesting/compounding of vaults, and the Eleven Finance team to support the protocol development.

Users can also engage in Eleven Finance staking via its ELE pools, earning additional rewards. The assets from the ELE pools, or ELE banks, are utilized by Eleven Finance's Leveraged Yield Farming platform.

How to use Eleven Finance?

The following wallets can be used to connect to the Eleven Finance app: MetaMask, WalletConnect, and Binance wallet.

Once your wallet is successfully connected to the Eleven Finance app, the LP and single vaults supported by the corresponding network will appear. For example, if you want to add tokens to the CAKE-WBNB vault, you will see that the vault “Uses PancakeSwap". That means that you will first need to create an LP on PancakeSwap. This can be done by following the “Add Liquidity” link to buy the tokens or contribute liquidity.

After that, you can add CAKE-WBNB LP tokens to the vault by clicking “Approve” and then "Deposit".

Eleven Finance fees for using the vaults are charged only at the time of unstaking. When unstaking LP tokens, the user pays a fee of 0.1%, and for unstaking single assets, the fee is 0.2%.

The ELE token

Eleven Finance's native token is the ELE token. The total supply of ELE is capped at 8,117,630 tokens. Initially, the planned total supply was 11 million tokens, but this amount was reduced due to the pre-sale not reaching 100%. As a result, 2,882,370 tokens were burnt.

20% of the total ELE supply was sold at the presale for BNB. The raised funds were invested in the platform development (20%) and locked in Eleven Finance's vaults (80%) in order to promote automatic purchases of ELE. 

In order to let people farm ELE, 67.5% of the total supply was allocated to the farming pools, including ELE single staking pools across all chains, and all boosted pools that reward ELE.

The remaining 5% and 7.5% of the ELE supply were allocated to the initial liquidity and the protocol development, respectively.

The main source of receiving ELE tokens is the rewards from the platform's vaults. ELE tokens accrue value through partial redistribution of vault fees and distribution of harvested vault rewards. 

Is Eleven Finance safe?

The Eleven Finance hack happened in June 2021 and is estimated to have earned the attackers $4.5 million worth of digital assets. The Eleven Finance exploit was made possible due to a vulnerability in one of the platform’s smart contracts’ functions present in its vaults. The bug allowed the attacker to double-spend Nerve shares they acquired during a deposit to the vault by withdrawing all LP tokens they had deposited. In total three vaults were affected - nrvBTC, nrvETH, and nrvFUSDT.

Eleven Finance audits can be found in the protocol dashboard on this webpage.

Partners 

Eleven Finance has partnered with multiple decentralized projects across various networks, such as SushiSwap, PancakeSwap, Trader Joe, Curve, Iron Finance, Wault Finance, etc.

What's next?

There has not been an official Eleven Finance roadmap published yet.

Links

https://docs.eleven.finance/