Acala Completes Web3 Foundation Stablecoin Grant Milestone

Bette Chen
Jun 1 · 7 min read

Acala Network

Acala is poised to become an open finance platform on Polkadot, an inter-connected blockchain ecosystem that provides financial stability, liquidity and accessibility. The Acala Dollar (aUSD) is a stablecoin that represents the first product built as a stepping stone towards achieving this vision. At the end of 2019, the Acala team received a development grant from Web3 Foundation — the powerhouse behind the research and development of the decentralized web including protocols such as Polkadot — to build a decentralized stablecoin platform. Now we are happy to announce that we have accomplished all the aims set out in the grant application, and more! 🚀

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At a glance, we have delivered:

  1. A running network that is ready to become a parachain on Kusama and Polkadot
  2. The multi-collateralized stablecoin aUSD, a self-service credit facility for stable aUSD. This is capable of using cross-chain or bridged in assets such as Bitcoin as collateral
  3. A unique user experience. Our web and mobile applications (while still evolving) have made the process simple and delightful
  4. Risk management mechanisms with more automation, efficiency, liquidity, capitalization and ultimately enhanced stability
  5. On-chain governance with progressive decentralization from the founding team steering the ship to council governance and democracy with referendums

Acala Network is built on Substrate, a customizable and upgradable blockchain framework, allowing us to implement sophisticated financial and technical innovations to improve the resilience, usability and adoption of stablecoin systems.

Multi-Collateralized Stablecoin aUSD

Acala uses over-collateralization as an instrument to mitigate credit risks, namely in the event of a default. The protocol can liquidate the collateral as pledged assets to pay back the outstanding loan. The Honzon stablecoin protocol is implemented as a set of runtime modules and is live on the Mandala Test Network. Read more on the implementation here and interact with the protocol here.

An Experience

Acala’s protocols/runtime modules and SDK are open-sourced with technical and financial primitives to power more cross-chain open finance applications and a rich ecosystem. There are several pathways and many benefits, specialist financial chain with customizable fee schedules, optimized performance and oracle services, to name just a few. To build with us and Polkadot, feel free to reach out and discuss.

More Stable

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Automated Liquidation

Diversified Liquidation Strategy — DeX + Auction

Acala Dex is a Uniswap-inspired exchange based on the constant-product mechanism, where a liquidity pool is established for each token pair, and the exchange rate is simply the amount of one token divided by the other. Users enjoy instant (no order book) token swaps, while token holders can provide liquidity into the pools to earn exchange fees, plus an additional reward (as profit share from stability fees) to almost guarantee their yield. The strong incentives aim to attract more liquidity to support Acala’s stabilization mechanism. Read more here.

Gradual Execution of Risk Parameters

Robust Oracle Infrastructure

Governance — Progressive Decentralization

Phase I: Start-up

Phase II: Community Participation

Phase III: Sufficient Decentralization

What’s Next

Delivering the stablecoin protocol checks off an important milestone towards Acala’s vision of becoming a multi-chain open finance platform. We are expanding our Ecosystem Program, so stay tuned for updates. Meanwhile, if you are also excited about building a fairer, more open and abundant financial future together, please get in touch.

About Acala

Learn more about Acala on acala.network, Medium, Twitter, GitHub and Acala Wiki. Join the discussion on Discord, Telegram and Riot Chat. Any inquiries please Email or DM us.

Stay informed about the Acala launch and subscribe to the Acala Newsletter.

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The Acala Stablecoin Project is proudly supported by the Web3 Foundation

Acala

Acala is the decentralized financial hub of Polkadot.

Bette Chen

Written by

COO & Co-Founder @Laminar & @AcalaNetwork. Full-stack Product Manager. Budling for a decentralized future.

Acala

Acala

Acala is the decentralized financial hub of Polkadot that makes it fast and easy to use or build financial applications, improving trading efficiency and saving valuable time. The platform offers a suite of DeFi primitives including a stablecoin, DEX, and staking deritatives.

Bette Chen

Written by

COO & Co-Founder @Laminar & @AcalaNetwork. Full-stack Product Manager. Budling for a decentralized future.

Acala

Acala

Acala is the decentralized financial hub of Polkadot that makes it fast and easy to use or build financial applications, improving trading efficiency and saving valuable time. The platform offers a suite of DeFi primitives including a stablecoin, DEX, and staking deritatives.

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