Acala is one of the most prominent projects in this Parachain auction event. In this article, we are going to discuss everything you need to know about the Acala network and what are the key highlights of the project.
What is Acala?
Acala Network is a layer-1 smart contract platform that's scalable, Ethereum compatible, and optimized for DeFi with built-in liquidity. It also comes equipped with an easy-to-use financial application suite all compiled into one robust offering from start to finish, making it perfect for developers who want full control of their decentralized apps.
Powered by Substrate and Ethereum compatible, Acala offers interoperable cross-chain functionality and robust security protocols to host financial applications on its decentralized network to become a DeFi Hub of the Polkadot ecosystem.
How does Acala work?
Powered by the advanced Polkadot’s Substrate framework, Acala will be able to host the Homa liquidity staking protocol and the Honzon stablecoin creation protocol on the Polkadot parachain. The network also accepts other wrapped assets such as renBTC as collateral to mint its stablecoin (aUSD). Details of each component in the network will be explained in this part.
See Also: What is Polkadot?
Acala will launch on the Polkadot network with a Crowdloan to bid for a parachain lease. The auction has been set up so that bidders can deposit their DOT tokens in order to support the project, and if successful they can get rewarded proportionately.
The creation of Honzon protocol is to make it easier for people in the crypto community and beyond. By creating a stablecoin that's both easy-to-use and backed through Collateralized Debt Positions (CDPs), the protocol will be able to accept collateral assets from multiple blockchains.
The Acala stablecoin such as aUSD is pegged to USD at a 1:1 ratio, this architecture will enable crypto users to take out of aUSD by depositing digital assets in the network. However, users are required to pay an interest fee on each loan they are committing to.
The efficiency will be greatly increased by using Chainlink together which allows decentralized pricing data feeds on Acala to be maintained and risk-free.
The design of Homa Protocol is to create liquidity from locked assets on the Acala Network. With traditional yield-farming, any locked assets are usable in order to receive interests. However, with Homa Protocol, users are able to participate in Yield Farming and use that locked assets for other activities.
Locked assets will be returned as an L-token. For example, when you deposit DOT tokens, you will receive L-DOT in return and L-DOT can be used for different purposes such as collateral to mint aUSD to supply for borrowers as a loan.
The Acala system will allow developers to create applications written in Solidity and mint assets that function similarly to ERC20 tokens. Cross-chain transactions such as renBTC or aUSD are all compatible with Acala at launch;
Any on-chain action within the EVM will be translated into Substrate code for Polkadot extensions like oracles who provide price feeds so interactions can happen seamlessly between chains without intermediaries
The main objective of Acala stablecoin is to expand the scaling solution and interoperability with other networks and ecosystems. Powered by the Polkadot network and Substrate technology, Acala’s stablecoin (aUSD) is built to offer unique features such as high security, cross-chain capability, and multi-collateral backed.
What is ACA token?
ACA is the native token of the Acala Network and can be used for several purposes such as:
- Network Utility Token: ACA can be used as the fee for native transactions and smart contracts. It can also be utilized in staking for collator, oracle and other network activities.
- Governance of the Network: Holders of ACA will have their voting rights in the Treasury Governance, Council member election, network upgrades and other management decisions within its network.
Detailed information about ACA Token
ACA Token Metrics
- Token Name: ACA Token
- Ticker: ACA
- Blockchain: Polkadot
- Token Standard: Updating...
- Contract: Updating...
- Token type: Utility, Governance
- Total Supply: Updating...
- Circulating Supply: Updating...
ACA Token Allocation
- Reward: 34%
- Strategic Investors: 29.13%
- Team: 20.25%
- Reserved: 11.62%
- Ecosystem: 5%
ACA Token Release Schedule
Recently in September 2021, Acala raised over $61M through the ICO event by more than 26,000 members around the world.
The project also raised $7M in Series A through a simple agreement for future tokens (SAFT) sale and $1.4M in the Seed Round before the ICO.
The supply of ACA is scheduled as follows:
How to buy ACA token
You can participate in the Acala Crowdloan by locking up your DOT tokens to receive ACA as a reward. ACA might be locked for 2 years for all eligible allocations.
1 DOT can be exchanged to 3 - 24 ACA.
How to mine ACA token
How to store ACA token
You can store ACA on Coin98 Wallet with only a few simple steps when the token is available on the market.
Roadmaps and Updates
Most of the important updates for Acala this year have been done. The next major event is the Acala launch, which is expected to be done at the end of this year.
Team, Investors, and Partners
The founding team of Acala is experienced in the IT and blockchain industry. Their long-term vision is to grow Acala to be one of the identical projects in the Polkadot ecosystem.
Acala is funded by many reputable investors including Parafi Capital, Polychain, and Arrington XRP Capital in the list.
Acala has been partnering with various projects across several categories to accelerate the development of the network.
Is ACA a good investment?
This article has provided some of the main ideas related to the ACA token and its implications. Still, it is important to note that there are a few key points that investors should take into account before making investment decisions:
One of the biggest hurdles for projects on a separate blockchain is interoperability and compatibility with other chains. Acala has shown its scalability by being compatible with Ethereum by integrating EVM. This will help the project to develop comprehensively in the future and become a bridge between Polkadot and Ethereum.
Even before the auction on Parachain, the project has gained a lot of confidence from the community, indicating that there are a considerable number of users that are supporting it. Acquiring an official position on the parachain would be a significant step for the development of the project.
The multi-collateral Type CBD that Acala Network offers is pretty similar to the architecture of MakerDAO. However, the assets are not limited to the DOT’s native tokens, many digital assets from other blockchains and ecosystems such as ETH and BTC are also supported. This strategy will accelerate the use cases of the Acala Network even more in the future where many projects will operate on their own blockchains.
The working architecture of Acala is similar to MakerDAO, a project that enables the generation of DAI as one of the leading stablecoins.
I hope you have gained all the important information about ACA including its features and highlights throughout this topic.
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