The Acala team has made it clear that it is looking forward to building a powerful DeFi system for the Polkadot ecosystem. We all know that DeFi has been exploding and proliferating its offering. We also know the growth story of the native token of Polkadot, DOT. Polkadot is a blockchain protocol designed as a cross-chain data-sharing platform. As we see it, DeFi as well as DOT has seen explosive growths in the market cap.
Enter Acala, a DeFi project built on Polkadot that could combine the best virtues of the Polkadot system as well as the DeFi architecture. A few days ago on 27th August, Acala announced a spate of series A funding which will be led by Pantera and collaborated further by ParaFi Capital, 1confirmation, DCG, and Arrington XRP capital. The team at Acala has been clear of its ambitions of building a DeFi power station for the Polkadot ecosystem with diverse financial primitives. It has proposed its first product on the table called Acala Dollar or aUSD which is a decentralized stablecoin based on Substrate with cross-chain multi-collateralization capability. Substrate is a framework wherein the developers can build the blockchain with extreme convenience and ease. It has also sent across a testnet lending protocol and a decentralized exchange taking its product count to three.
Thanks to its three products, users will now be able to send, receive, and lend with rewards earned in USD across any blockchains that are connected to the Polkadot network. Acala has been revered as the star in the making and is considered as the USP of the Polkadot network.
Co-founder of Acala Ruitao Su opined that,
“Choosing Polkadot is not only because of Ethereum’s clogged network and its exceptionally skyrocketing gas fees. We have known the team behind Substrate for more than two years now and love the fact that many developers follow Gavin Wood, the founder of Polkadot.”
The founder admitted that they had considered using the Cosmos network but that was ruled out owing to the lack of security confirmations making bootstrapping difficult to achieve. With Polkadot’s shared security design, the team had little to worry about and that its technicalities were all very appealing to the team per se. Acala is all set to become the most active parachain on Polkadate with nearly 14,500 new accounts and a total value of $52 million locked in a 3-week testnet campaign. It also credits itself to bring Polkadot into mainstream DeFi making it a tough competition to Ethereum.
Acala’s innovation knows no bounds especially its staking derivative. Users can easily stake their DOTs in exchange for a fungible of staked DOT called L-DOT. Users do not have to renounce their staking rewards for DeFi yields.
Since Acala has now completed all the tech due diligence, it plans to spend fresh capital on community development and to market itself well. In fact, Acala apart from being a parachain of Polkadot also is a blockchain that can be used to build applications.