The Future of Staking Podcast Series focuses on what we expect to see grow as important products and new ideas circulating in the Proof of Stake ecosystem in 2020 and beyond.
This week we chatted with Bette Chen, COO of Acala.
Acala is a new blockchain powering open finance applications. The blockchain will provide a stablecoin (aUSD) as well as staking liquidity to the Polkadot network. The network will be governed entirely by Acala Network Token (ACA) holders. Acala is being developed jointly by Laminar One, and Polkawallet.
Built for Polkadot
The team behind Acala has deep roots in the Polkadot ecosystem. The project is being developed by Laminar One and Polkawallet. Laminar One is an open finance platform offering synthetic assets and margin trading, and Polkawallet, a native wallet on the Polkadot network offering cross-chain asset management, staking, and governance. Both of these projects plan to use Acala’s Honzon and Homa protocol once the blockchain secures a parachain slot.
Acala is being built on substrate. The team decided to build on substrate because it offered what they were looking for in terms of tech criteria, but also because of the community that is centered around substrate and ultimately Polkadot.
“When you look at the Polkadot ecosystem, it is a network of a lot of blockchains. It is a community of blockchains rather than a community within a blockchain.”Bette Chen, COO Acala
Inspired by MakerDAO, Acala’s Honzon protocol will allow users to leverage crypto assets supported by Acala to generate aUSD (Acala stablecoin) by creating a collateralized debt position. Honzon will initially support DOT, but there are plans to support Bitcoin and Ethereum once there is a bridge to Polkadot.
Outside of DeFi, Acala sees gaming, social media, and payments as use cases for aUSD.
Acala’s Homa protocol will allow for the liquid staking of DOT. DOTs can be staked, trustlessly through Acala. The staked DOTs will continue to generate rewards, and users will receive L-DOT or liquid DOT in return. The L-DOT is a derivative of DOT and represents the value of DOT. You will be able to use L-DOTs for investing, lending, and other DeFi applications.
Decentralized Sovereign Wealth Fund
Acala plans to create a decentralized sovereign wealth fund with the income surplus generated by the network. The inspiration for the model came from traditional sovereign wealth funds run by nation states.
The Acala network will be governed entirely by ACA token holders, which is the governance token on the Acala network. Holders of the ACA token will determine how these funds will be used.
Acala is about to launch Testnet Candidate 3 (Mandala TC3). The testnet will test staking liquidity (L-DOT) as well as a new savings product being in their DeX, which will allow users to earn fees and rewards in exchange for liquidity. The testnet will also feature a new web Dapp with improved UX.
They are also preparing to launch a parachain on Kusama.