Polkadot Parachains and Venture Funds Team Up to Launch $250 Million ‘aUSD Ecosystem Fund’ to Grow Polkadot’s Native Stablecoin, Acala USD

Dan Reecer
Published in
6 min readMar 23, 2022

Acala, along with an initial nine Polkadot parachain teams and several supporting venture funds, has launched the $250 million aUSD Ecosystem Fund to support early-stage startups building applications with strong stablecoin use cases on any Polkadot or Kusama parachain. The fund participants are seeking Solidity or Substrate-based applications driving yield or utility for aUSD, including money markets, DEXs, derivatives, asset management, DAOs, payments, and other use cases. Learn more and apply to the aUSD Ecosystem Fund here.

aUSD’s Origins

The four Acala co-founders (Bette, Bryan, Ruitao, and Fuyao) set out over three years ago in Auckland, New Zealand, to build a DeFi-focused parachain in the Polkadot ecosystem after being stifled by Ethereum scaling challenges and evaluating other options such as Cosmos and ETH2. The idea for Acala started with the anticipated need for a native, decentralized, multi-chain stablecoin to serve as the foundational ‘oil’ to operate the would-be economy that Polkadot was sure to enable. The team landed on an over-collateralized, crypto-backed, decentralized stablecoin model due to its proven and reliable mechanism. An ecosystem of hundreds of connected blockchains needed a safe, reliable, and stable currency to power its economic activity.

In addition to a strong stablecoin, the team also anticipated the need for unlocking liquidity to grow the Polkadot economy with healthy debt, as any healthy economy needs. Some of DOT’s primary use cases are staking and crowdloans, but by simply locking DOT away, those DOT are not able to be leveraged in the DOT economy. Economies of any nature need healthy debt in order to grow. In order to enable a more vibrant Polkadot economy, aUSD enables users to unlock liquidity from their reserve assets, such as DOT, KSM, ACA, KAR, as well as cross-chain assets like parachain tokens, BTC, or ETH. These reserve assets can be collateralized and used to mint aUSD to earn yield while maintaining ownership of the reserve assets.

Three years later, on February 9, 2022, aUSD was launched and Acala’s entire core team and community are now driving towards the common goal of aUSD growth.

Polkadot’s Multi-chain Economy

Polkadot is very much a long-term bet on revolutionary blockchain technology with a radical focus on decentralization. Any team, whether a parachain or DApp, building in the Polkadot ecosystem has come here to enjoy Polkadot’s shared security model allowing any parachain to get plug-and-play security from Polkadot’s core ‘Relay Chain’. Parachain teams also come to Polkadot for its promise of native, trustless cross-chain functionality allowing tokens and data to flow freely from network to network without trusting bridges and sometimes without users even needing to know. In order for this vision to come to fruition, parachain teams are now beginning to work together on initiatives to kickstart cross-chain interactions.

To name a few examples of what’s being launched as we speak: Astar Network has launched a hub for WASM + EVM, Acala is providing aUSD as the ecosystem’s native stablecoin via its DeFi network, Moonbeam is providing a fully Ethereum-compatible platform, Manta is providing privacy technology for crypto assets, Centrifuge specializes is real world asset financing, Efinity brings NFT, gaming, and metaverse platforms, HydraDX brings a world-class DEX chain, OriginTrail brings decentralized knowledge graph, Parallel is building a platform filled with multi-chain DeFi products, and Zeitgeist is launching a parachain optimized for prediction markets and futarchy. Once all of these chains begin working together, Polkadot will experience exponential network effects and growth.

One of the most fundamental methods of collaboration between parachains is building up liquidity, pairs, yield, and utility for a decentralized stablecoin native to Polkadot. The 9 aforementioned teams have teamed up to grow aUSD as a building block for the ecosystem with which hundreds of applications will be able to thrive over the coming decades as Web3 proliferates into the global economy.

“Building the native, decentralized stablecoin of Polkadot and Kusama has been at the heart of Acala’s work for over three years,” said Acala co-founder Bette Chen. “It is fantastic to see this group of parachains and funds coming together to grow the cross-chain ecosystem with aUSD as a foundational building block.”

“As Polkadot opens its doors and other parachains come online this year, Acala is poised to become the leading decentralized stablecoin and DeFi hub of the Polkadot ecosystem,” said Kanav Kariya, President of Jump Crypto. “At Jump, we look forward to working with, and investing in, teams driving innovation within the broader ecosystem.”

aUSD Ecosystem Fund

aUSD Ecosystem Fund goals:

  1. To support and facilitate investment in early-stage teams building in the Polkadot and Kusama ecosystem with a strong use case for the aUSD stablecoin
  2. Grow the Polkadot and Kusama ecosystem through increased cross-chain activity and growth of Polkadot’s native stablecoin, aUSD

Qualifying Projects: Any DApp or early-stage parachain building on Polkadot or Kusama that drives growth and utility of aUSD

Supporting Parachains: Acala, Astar Network, Centrifuge, Efinity, HydraDX, Manta, Moonbeam, OriginTrail, Parallel, and Zeitgeist. Parachain teams interested in joining the fund should reach out to their contacts on the Acala core team.

Supporting Funds:

How the aUSD Ecosystem Fund can support your team

Acceptance into the aUSD Ecosystem Fund comes with a variety of support from the Acala team, as well as all partners and supporters of the fund. Teams who come through the fund will:

  • Raise capital from industry-leading funds
  • Build with support from Acala’s world-class engineering team for both Solidity and Substrate-based projects
  • Boost your TVL with Acala’s support of injecting aUSD liquidity into your project
  • Expand your ecosystem through the powerful network of the fund
  • Grow your brand with fundraising announcement and marketing, project launch marketing support, as well as ongoing community building, education, and awareness provided by Acala and fund partners

Who should apply

  1. aUSD stablecoin use cases

We are looking to support DApps built in Solidity or Substrate that drive yield or utility of the Acala Dollar, aUSD. Substrate modules or EVM-compatible DApps both qualify. The following are examples of a great fit for the fund:

2. Parachains, Infrastructure, & Tooling

The aUSD Ecosystem Fund will also support early stage parachain teams, wallets or other similar tooling critical to supporting the aUSD ecosystem.

🚀 Apply now to get started.

Media Contacts

Dan Reecer
Chief Growth Officer, Acala

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.

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