Equilibrium to Integrate With Acala to Bring the aUSD Stablecoin to its Ecosystems on Polkadot and Kusama

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Acala

4 min readJun 15, 2022

Acala is excited to announce the latest parachain integrations for the aUSD stablecoin: Genshiro and Equilibrium. The integration supports Equilibrium’s lending, borrowing, staking, and cross-chain earning services through aUSD into the Genshiro ecosystem on Kusama and soon in the Equilibrium ecosystem on Polkadot. aUSD will facilitate cross-chain trading and additional services to support features of several Equilibrium core products.

Meet Equilibrium

Equilibrium is a DeFi platform on Polkadot supporting digital asset trading and borrowing by combining a money market with an orderbook-based DEX to help solve existing DeFi limitations. Equilibrium has identified four crucial areas it plans to address using its platform:

The market’s inefficient approach to liquidation
Excessive over-collateralization
Fragmentation of DeFi liquidity
A complicated user experience

Central to Equilibrium’s problem-solving solutions is liquidity, ensuring traders have access to the digital assets they require. Through its services of lending, borrowing, staking, and cross-chain trading interactions, Equilibrium plans to generate enough liquidity to address the efficiencies highlighted above.

Why Acala and aUSD

At the core of Acala’s services is aUSD –a decentralized, over-collateralized stablecoin powering the DotSama (Polkadot and Kusama) ecosystem. aUSD enjoys extensive cross-chain fungibility, making it a practical option for platforms seeking to improve their liquidity like Equilibrium. aUSD’s peg to the US Dollar and backing from several assets creates protection from volatility, often customary in several crypto assets.

aUSD facilitating Equilibrium DeFi functions

Equilibrium’s ecosystem includes a money market, stablecoin swap AMM, an on-chain order book, a DEX, and market-making pools, all of which require liquidity. aUSD’s presence in Equilibrium will facilitate liquidity, among other advantages, after its integration. Users should expect the following benefits:

Raising liquidity through borrowing aUSD

Enabling borrowing aUSD from Equilibrium’s money market helps users get additional working capital without the need of selling their volatile portfolio of crypto assets. They can get aUSD stablecoins instead by pledging their holdings in a form of a basket of diversified collateral. A minimal collateralization level (which is as low as 105% at Equilibrium) introduces way more flexibility to borrowers while risk-based interest allows them to affect the costs of borrowing directly.

2. Token Swaps

aUSD’s integration will enable Equilibrium’s native token swapping with aUSD, creating access to a broader market for Equilibrium users.

3. DEX Trading

Borrowing and trading digital assets become simple with a stablecoin. Volatile tokens can deter lenders and borrowers from engaging in Equilibrium’s services; however, aUSD provides a practical reference to determine volatile asset prices.

4. Stablecoin swaps

As Equilibrium is running an ‘official’ implementation of the Curve’s automated market maker for low-slippage swaps of stablecoins, ecosystem users will be able to swap aUSD for major stablecoins like USDT back and forth on Equilibrium.

5. Increased Utility and User base

aUSD serves as the default routing asset and means of exchange in the Polkadot and Karura ecosystems. Equilibrium’s integration supports aUSD’s target by broadening its utility and user base, facilitating a flourishing DotSama ecosystem. The collaboration will also result in Equilibrium’s growth through connections to other protocols via aUSD.

6. Increased Staking Options

aUSD’s integration allows Equilibrium users to earn by staking aUSD into Equilibrium’s liquidity pools. aUSD owners can also leverage their assets to borrow other cryptocurrencies from Equilibrium through its money market.

Acala and Equilibrium’s partnership provides a synergistic foundation for both platforms through aUSD and the cryptocurrency financial services offered on Equilibrium. Equilibrium users should expect deeper liquidity pools with better user benefits following aUSD’s integration.

$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, offering 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 Karura or looking for support from Acala Grants, please get in touch with our team to chat about how we can support you.

About Equilibrium

Equilibrium is a one-stop DeFi platform on Polkadot that allows for high leverage in trading and borrowing digital assets. It combines a full-fledged money market with an orderbook-based DEX. EQ is the native utility token that is used for communal governance of Equilibrium. xDOT is a liquid and tradeable wrapped DOT that unlocks liquidity of DOT locked in parachain auctions and delivers multiple crowd loan bonuses on Polkadot.

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.