ACA Staking Program Launches, Leveraging ACA Buyback with Protocol-Owned Liquidity

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Acala

4 min readJul 28, 2022

After the success of the first ACA staking program, we’re excited to launch a new staking campaign for ACA network owners. Approximately $200k worth of network-owned surplus will be used to buy back ACA in order to distribute ACA-aUSD LP tokens (Liquidity Provider tokens) to ACA stakers. Details for the new ACA staking program are:

⏳Starts: August 4th, 2022 (exact time is variable based on block times)

🏆Rewards: ACA-aUSD LP token

🎖️Loyalty Bonus: 50%

📆Loyalty Period: 90 days

⏱ Program Length: Expected ~3 months, but actual duration and amount will be dependent upon rolling rewards deposited

Start Staking now: Participation in the ACA staking program requires ACA holders to hold ACA in their wallets, navigate to the Acala Apps website, and find staking under the Earn-Collateral Staking page.

How the program works

Approximately $200k worth of network surplus will be used to buy ACA to use to acquire ACA-aUSD LP tokens which will be distributed to ACA stakers. Instead of diluting the ACA token value through inflation, Acala will buy-back ACA tokens using network-owned staking reward excess. Acala will donate the ACA-aUSD LP tokens to a collateral staking reward vault, allowing ACA holders to stake ACA and earn a pro-rata share.

Acala’s staking reward incentivizes community members to lock up their tokens and remove them from circulation, creating a positive feedback loop. Participants also increase their network percentage ownership (ACA tokens have a fixed, non-inflationary supply) while receiving aUSD in the form of the yield-bearing ACA-aUSD LP token. By holding ACA-aUSD LP tokens, all ACA stakers will become liquidity providers for the ACA-aUSD trading pair on AcalaSwap. This allows you to passively earn trading fees while holding the LP tokens, and also gives the option of redeeming LP tokens for the underlying ACA and aUSD assets. Acala will distribute the ACA-aUSD LP tokens every five blocks until the reward pool becomes empty. To earn the full staking reward, participants must stake their ACA for the entire ACA staking program duration and not claim their rewards until the program ends.

The duration of the ACA staking program will be three months, while the actual staking duration and amount deposited will depend on the deposited rolling rewards.

ACA Staking Explained

During the first ACA staking program, Acala executed a buy-back of ACA tokens using network-owned staking reward surplus, avoiding inflating existing token supply, which decreases percentage network ownership for current holders.

ACA is a non-inflationary reserve utility token for Acala and has several core facets, helping underpin the Acala ecosystem:

ACA powers the aUSD stable currency and its decentralized monetary reserve, the Acala Treasury
Holders can use ACA as a collateral reserve to mint aUSD
ACA is the base transaction fee token on Acala
ACA governs the Acala economic system and governing bodies, as well as the Acala chain and protocols

Read more about the initial ACA staking program can be found here and read more about ACA here.

Where do stake when the program goes live: Participation in the ACA staking program requires ACA holders to hold ACA in their wallets, navigate to the Acala Apps website, and find staking under the Earn⃗-Collateral Staking page.

New to LP tokens and Liquidity providing? Watch this video to learn how liquidity pools work:

Other Important Information

During the ACA staking period, the APY changes in real-time with on-chain rewards, the number of participants, and specific APY is subject to the page display at the time of observation. There is no fixed APY for staking ACA.

Participants can also redeem their initial staked ACA tokens before the loyalty period ends. Early redeemers receive their principal amount and 50% of the LP rewards, with the remaining gains distributed back to the reward pool to be shared by other stakers. By staying in the pool and earning loyalty, you are earning additional rewards from people who left the pool early.

For more information on how to stake ACA and enjoy ACA-aUSD LP token rewards, follow this guide.

$250M aUSD Ecosystem Fund

If you are a developer interested in building a project that drives yield or utility of the aUSD stablecoin on Acala or any other parachain, apply for funding from the $250 aUSD Ecosystem Fund. The aUSD Ecosystem Fund is part of the broader Acala Ecosystem Program, which offers liquidity for new projects, Acala Foundation Grants, engineering support, and other support to ensure the success of the aUSD ecosystem.

Build on Acala

If you’re a team looking to build on Acala’s EVM+, integrate the aUSD stablecoin, get funding from the $250 million aUSD Ecosystem Fund, or receive support from Acala Grants, please get in touch with our team to chat about how we can support you.

About Acala

Acala is a decentralized finance network powering the aUSD ecosystem. The core product, Acala USD, is a decentralized, multi-collateral, crypto-backed stablecoin serving as the native stablecoin of the Polkadot ecosystem. Acala’s Ethereum-compatible blockchain has built-in DeFi protocols for application developers to leverage, including a trustless staking derivative (liquid DOT — LDOT), a decentralized exchange, and the EVM+, a hybrid EVM offering fully Ethereum-compatible development environment plus full compatibility with Substrate. Karura is Acala’s sister parachain to serve the Kusama ecosystem and shares the same codebase as Acala.

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