Acala
Acala wants to become Polkadot's "all-in-one DeFi hub." The platform is also compatible with Ethereum, which means it can use the power of the blockchain with the most smart contracts and the many decentralized applications (dApps) that run on the Ethereum Network.
Acala also makes it easy for blockchains to work together and offers a wide range of financial applications. These include liquid DOT, which is an application for "trustless staking derivatives," aUSD, which is a stablecoin backed by a number of digital assets across chains, an automated market maker (AMM), and a decentralized exchange (DEX). Also, all of the above services have very small fees for transactions. Also, any type of token can be used to pay for these transaction fees.
Ruitao Su, Bette Chen, Fuyao Jiang, and Bryan Chen started Acala in 2019 through the Acala Foundation. They did this with the help of Polkadot's Laminar and Polka Wallet ecosystem teams. The Acala Foundation is in charge of running the network until it is fully decentralized. After that, the people who own ACA tokens will run the network instead of the foundation.
Acala Network got help from a lot of different places. In March 2020, Polychain Capital, KR1, P2P Capital, and HashKey helped Acala Network raise $1.4 million in a seed round. In August of the same year, Acala Network raised $7 million in Series A through a simple agreement for future tokens (SAFT) sale. Pantera Capital led the sale, and investors like 1 Confirmation, Digital Currency Group, and Arrington XRP Capital followed. Multiple grants for development have also been given to the Acala Foundation by the Web3 Foundation.
Acala Network, like all other DeFi hubs, wants to offer an alternative platform to Ethereum (ETH) where users can access DeFi services and dApps without scaling issues. With Acala's micro-gas fee system, the network also solves the problems of rising gas prices and traffic on the network. So, users only have to pay a small fee when they want to do something on the network.
Honzon- Honzon is the protocol for stablecoins. The stablecoin aUSD from Honzon is tied to the U.S. dollar and backed by crypto assets through a system of collateralized debt positions (CDP). MakerDAO and their DAI stablecoin were the first to bring attention to CDPs as a way to keep the prices of crypto assets stable in a decentralized way. Honzon can accept DOT or bridged assets like Bitcoin (BTC) and Ether as collateral (ETH).
Homa- The Homa protocol makes sure there is liquidity by using a staking strategy that is adjusted by an algorithm. Homa tokenizes assets that have been staked by setting up a staking pool on Acala Swap.
Within Acala Swap, LDOT is exchanged for staked DOT, and both tokens continue to be freely tradable on all Polkadot-enabled exchanges. Whoever has LDOT can trade it in at any time for DOT.
The Acala token, or ACA, is a key utility and governance token within the Acala network. Its three main uses are:
Parachain leasing: During the para-chain leasing phase, anyone who bonds DOT for Acala will get ACA tokens to secure a para-chain slot.
Governance: ACA tokens are used to take part in governance issues like suggesting network changes, voting on referendums, and managing fees.
Transaction fees: Both the Honzo and Homa protocols get fees from CDP repayments, liquidations, and L-DOT transactions.
The Acala Network is a big project that wants to connect Ethereum and Polkadot. The platform has a lot of DeFi services, like stablecoin, liquid staking, and DEX, that do not require users to pay high gas fees. The next challenges for the network are to launch its main net and mint its token for decentralized governance. With the money, grants, and a good team, Acala Network has a big chance of making big steps forward in the DeFi field.
