Acala Team Receives Fifth Web3 Foundation Grant for ‘xTokens,’ Providing Cross-Consensus Messaging for Fungible Assets on All Polkadot and Kusama Parachains

Acala‘s xTokens grant follows the team’s previously awarded grants for the aUSD stablecoin, Acala EVM, LaminarChain, and Reusable Libraries

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Acala

3 min readMay 5, 2021

Acala has delivered all milestones for the Web3 Foundation grant we received for our xTokens pallet, which brings cross-consensus messages (XCM) ability for fungible assets to all parachains in the Polkadot and Kusama ecosystems (Wave 9 Grants). You can find the implementation on Github. We invite any parachain team to become #ComposableWith Acala by simply following the instructions on the Acala Wiki. This marks the fifth Web3 Foundation grant received by Acala and Laminar, the development arm behind Acala. See all Web3 Foundation grants here.

Overview

XCM, and the xTokens implementation, is a fundamental component to enable a cross-chain ecosystem and bring the Polkadot and Kusama vision to life. Cross-consensus messages (XCM) is a generic message format that is very flexible but loosely defined. Therefore, we needed to provide an implementation of the required use case to allow for cross-chain transfers, namely to send and receive fungible assets from parachain to parachain, and between relay chain and parachain. We have developed an implementation guide, as well as a reference implementation for xtokens (Github) that has already been used and proven by teams including Acala, Laminar, Plasm, HydraDX, Phala, Bit.Country, Snowfork, Crust, Darwinia, Moonbeam, and Nodle, all of whom have successfully completed cross-chain fungible token transfers on Polkadot’s parachain testnet.

We believe all chains on Polkadot and Kusama should be composable with each other — from exchanging value to exchanging and altering states. The cross-chain fungible asset implementation is the first step towards this goal.

What’s Next for Acala and Karura

Acala’s Kusama-based DeFi hub, Karura, is on the cusp of participating in the first parachain slot auction in hopes of soon launching on Kusama. Karura will bring the Karura Dollar (kUSD), the Karura DEX, and liquid KSM staking (LKSM) to the Kusama ecosystem. Karura aims to win the first public parachain auction on Kusama. Karura will serve the DeFi demand of the Kusama community, while Acala will subsequently launch to serve the DeFi demand of Polkadot and all other bridged networks like Ethereum and Bitcoin. Acala, in a similar fashion, aims to win the first parachain slot auction on Polkadot.

Get testnet tokens and try the Karura and Acala apps today at apps.acala.network.

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About Acala

Acala is the decentralized financial hub and stablecoin of Polkadot that makes it fast and easy to use or build financial applications, improving trading efficiency and saving time. The platform offers a suite of financial primitives: a multi-collateralized stablecoin backed by cross-chain assets like Bitcoin, a trustless staking derivative, and a decentralized exchange to unleash liquidity and power financial innovations. Acala is the de facto open platform for finance applications to use smart contracts or built-in protocols with out-of-the-box cross-chain capabilities and robust security.

About Karura

Karura is the all-in-one DeFi hub of Kusama. Founded by the Acala Foundation, Karura is a scalable, EVM-compatible network optimized for DeFi. The platform offers a suite of financial applications including: a trustless staking derivative (liquid KSM), a multi-collateralized stablecoin backed by cross-chain assets (kUSD), and an AMM DEX — all with micro gas fees that can be paid in any token.