Acala Network is the decentralized finance center of Polkadot, specializing in providing DeFi services such as stablecoins, staking, lending, and multi-chain DEX.
Built on Polkadot's Parachain model, Acala ensures high security, flexible scalability, and the ability to upgrade the network without forking. This project helps users maximize the value of staking assets while promoting the development of decentralized financial products on the Polkadot platform.
MAIN CONTENT
Acala is the DeFi center of Polkadot, providing stablecoins and a variety of financial services.
The two main protocols, Honzon and Homa, help optimize liquidity and flexible borrowing.
Token ACA is used for governance and activating utilities within the ecosystem.
How does Acala Network operate?
Acala operates based on two main protocols: Honzon and Homa, which help optimize borrowing and staking activities. These protocols have been proven effective through numerous studies and in-depth reports on DeFi.
Among them, Honzon is a stablecoin protocol that allows users to deposit assets like DOT, ETH, and BTC to borrow the stablecoin aUSD based on the CDP model. This protocol helps enhance liquidity and sustainably expand multi-chain DeFi.
Mr. Ruitao Su, Co-founder of Acala, 2023: The Honzon protocol enhances the scalability and liquidity of the Polkadot ecosystem through a decentralized stablecoin model.
The automatic liquidation system activates when asset values drop, based on accurate Oracle data, helping to maintain the stability of the stablecoin aUSD within the ecosystem.
How does the Honzon protocol work?
Honzon allows users to deposit assets like DOT, ETH, and BTC to open a collateralized debt position and borrow the stablecoin aUSD with a collateral ratio of 50% to 75%. This process optimizes borrowing capacity and maintains the liquidity of the ecosystem.
During the collateralization process, assets are locked in CDP and may be automatically liquidated when their value falls below the collateral threshold, to protect the system from loss risks.
Mr. Ruitao Su, Co-founder of Acala, 2023
This protocol has been confirmed by numerous studies for its scalability and sustainability in multi-chain DeFi activities, contributing to enhancing user experience and ecosystem reliability.
What is Homa and what are its highlights?
Homa is a staking protocol that allows users to convert staking assets like DOT into L-Assets, such as L-DOT, which can be freely traded and utilized in DeFi activities. This mechanism maximizes the value of locked assets while retaining original staking rewards.
The highlight of Homa is its ability to increase the efficiency of staking assets, supporting flexible borrowing and trading, allowing users to fully leverage the value of their assets within the Acala ecosystem.
Blockchain expert, 2023: Homa opens up new opportunities for users to extract the value of staking assets in DeFi while retaining the original rewards.
What are the main products of Acala Network?
Acala provides a diverse portfolio of products to serve borrowing, lending, trading, and staking activities, optimizing performance within the Polkadot ecosystem:
Borrow aUSD: Borrow stablecoin aUSD based on collateral assets such as DOT, LDOT, xBTC, renBTC.
Acala Dollar (aUSD): Multi-chain stablecoin used for lending, saving, and trading.
Swap: DEX providing trading and liquidity pools for various asset pairs.
Earn: Automatic profit pools from liquidity pairs with Token ACA rewards.
Liquid Staking: Staking DOT into L-DOT, used for borrowing or trading.
Oracle Price: Provides accurate price data, multi-source supporting trading.
Governance: Managing the network according to a decentralized roadmap, increasing transparency.
Token ACA – the center of the Acala ecosystem
Token ACA is the utility and governance token of the ecosystem, with a total supply of 1.6 billion and over 1 billion in circulation. This token allows users to participate in governance, vote, and earn rewards in the system's activities.
Token ACA allocation Percentage Ecosystem Development 5% Reserve 10.76% Support Team 11.66% Initial Investors 18.33% Founding Team 20.25% Liquidity & Auction Program 34% Community 49.76%
The Token ACA distribution schedule is designed in phases to ensure stability and sustainable development of the ecosystem, while attracting community and investor participation.
Development status and investors of Acala
Acala has raised over $20 million from major funds such as Pantera, Coinbase Ventures, Spartan, and ParaFi. Among them, the ICO round on TokenSoft raised $12 million, demonstrating the trust of reputable investors.
The founding team consists of experts such as Ruitao Su, Bette Chen, Fuyao Jiang, and Bryan Chen, all with extensive experience in Blockchain, Polkadot, and DeFi.
Market expert, 2024: Acala maintains its position in the Polkadot ecosystem despite challenges with stablecoin peg, thanks to its team and sustainable development strategy.
Latest updates on the status of Acala
As of September 16, 2024, Acala's market capitalization reached approximately $64 million. Although the stablecoin aUSD lost its peg since April 2022 and has not fully recovered, the project has transitioned to the aSEED platform to strengthen its foundation and maintain investor confidence from major exchanges like Binance.
In the context of a volatile market, Acala remains a pillar in the DeFi ecosystem of Polkadot, with long-term growth potential.
Frequently asked questions about Acala Network
What is Acala Network?
Acala is the DeFi center on Polkadot, providing stablecoins, staking, lending, and multi-chain DEX services, helping to enhance liquidity and maximize the value of cryptocurrency assets.
What is Token ACA used for?
Token ACA is used to govern the ecosystem, vote on decisions regarding activities, and receive rewards within the Acala system.
How does the Honzon protocol work?
Honzon allows users to open a collateralized debt position to borrow the stablecoin aUSD, with a collateral ratio of 50% to 75%, and has an automatic liquidation mechanism when asset values drop.
What are the highlights of the Homa protocol?
Homa helps stake DOT into L-DOT, allowing conversion to flexible tokens, maximizing asset utilization in DeFi activities.
Does Acala Network have major investors supporting it?
Acala has raised capital from major funds such as Pantera, Coinbase Ventures, and ParaFi, with a total capital raised of over $20 million, demonstrating high trust from investors.
Source: https://tintucbitcoin.com/acala-network-aca-la-gi/
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