Acala

Acala (ACA) is a decentralized stablecoin platform and liquidity hub built for the Polkadot ecosystem. The project has a rich history, marked by significant milestones and funding rounds.

In August 2020, Acala closed a $7 million simple agreement for future tokens (SAFT) led by Pantera Capital, with other notable investors such as 1confirmation, Arrington XRP Capital, ParaFi Capital, Coinfund, Spartan Capital, and more. This funding round demonstrated the confidence of prominent investors in Acala's vision for decentralized finance (DeFi) on Polkadot.

Acala's token economy is based on two key tokens: the stablecoin aUSD and the native token ACA. The ACA token is used for various purposes, including transaction fees, node incentivization, governance, and algorithmic risk adjustment. It has a fixed supply of 1 billion tokens, minted at the genesis block launch.

The Acala Dollar (aUSD) is a decentralized stablecoin pegged to the US dollar at a 1:1 ratio. Users can borrow aUSD by locking in selected crypto assets as collateral and pay interest to maintain the loan. This stablecoin is designed to facilitate cross-blockchain open finance applications within the Polkadot ecosystem.

Acala's founders, Ruitao Su, Fuyao Jiang, and Bryan Chen, bring extensive experience in DeFi and blockchain development. The project has also attracted a diverse team of contributors and advisors, including experts in software engineering, economics, and governance.

Throughout its history, Acala has focused on building a robust DeFi platform, offering a range of services and tools for users. Its liquidity hub and decentralized exchange aim to improve the user experience for loan creation and liquidation, making it a significant player in the Polkadot ecosystem.

Acala (ACA) is the native utility token for the Acala Network, a decentralized finance (DeFi) platform built on the Polkadot blockchain. The Acala Network provides a wide range of financial services, including stablecoins, liquidity pools, and decentralized exchanges. ACA tokens are used for governance and as collateral to mint stablecoins like aUSD, which is pegged to the US dollar at a 1:1 ratio.

ACA token holders have voting rights in the network's governance, allowing them to influence key decisions such as Treasury governance, Council member elections, and network upgrades. Additionally, ACA is used as collateral to mint aUSD, ensuring the stability of the stablecoin.

The total supply of ACA is capped at 1.6 billion tokens, with a circulating supply of approximately 885.74 million tokens. The token distribution is divided among the founding team, early backers, backers, the Acala community, auction reserves, liquidity programs, and ecosystem development.

ACA can be staked to earn rewards, which incentivizes users to hold and stake their assets. This contributes to the network's security and stability. Governance participation rewards also encourage active participation in the network's governance, fostering a robust and engaged community.

Acala's integration with Polkadot allows it to connect and operate across multiple blockchain networks, addressing scalability and interoperability challenges in DeFi. This enables better access to liquidity and facilitates cross-chain transactions.

ACA tokens can be acquired through crowdloans, where users can contribute Polkadot (DOT) tokens to support the Acala Network. In return, they receive ACA tokens as a reward.

Overall, the Acala Network and its native token ACA aim to provide a scalable, interconnected, and efficient DeFi ecosystem, addressing the limitations of traditional finance and enhancing the capabilities of decentralized finance.

The Acala Token (ACA) has several strengths that make it a promising investment opportunity:

1. Scalability and Interoperability: Acala's integration with Polkadot allows for seamless interaction across multiple blockchain networks, making it a scalable and interoperable solution for decentralized finance (DeFi) applications.

2. Ethereum Compatibility: The Acala Token was designed to be highly compatible with the Ethereum network, enabling users to leverage popular tools and programming languages, which can improve development times and include more features.

3. Passive Income Generation: ACA offers users the ability to earn passive returns through staking, which is a low-risk and accessible way to generate income. Staking rewards are paid out in ACA, allowing users to compound their returns.

4. Governance and Participation: ACA holders can participate in network governance by voting on key decisions, ensuring that the community has a significant say in the direction of the project.

5. Utility and Versatility: The ACA token serves multiple purposes, including network governance, transaction fees, smart contracts, and collateral for minting the Acala Dollar (aUSD), making it a versatile and integral part of the Acala ecosystem.

6. Liquidity Generation: Acala's built-in liquidity generation features and ready-made financial applications streamline developer actions, making it a vital liquidity hub for the Polkadot ecosystem.

These strengths position Acala Token as a robust and well-rounded DeFi solution, offering users a range of benefits and opportunities for growth.

Acala (ACA) is a cryptocurrency that operates on the Polkadot blockchain, serving as the native utility token for the Acala Network. This network is a decentralized finance (DeFi) hub that provides various financial services. ACA is used for governance and as collateral to mint stablecoins, particularly the Acala Dollar (aUSD), which is soft-pegged to the US Dollar.

Acala's financial risks are primarily related to its stablecoin mechanism and the management of collateral assets. The Acala stablecoin protocol employs a dynamic system of Collateralized Debt Positions (CDPs), on-chain liquidators, and risk management mechanisms to maintain stability. Key risk parameters include the stability fee, liquidation ratio, liquidation penalty, required collateral ratio, and debt ceiling. These parameters are adjusted to manage the risk profiles of different collateral assets and ensure the solvency of the system.

• Stability Fee: This is the interest rate or cost for minting Acala stablecoin, used to influence supply and demand and maintain stability.
• Liquidation Ratio: This is the ratio at which collaterals are sold to pay off outstanding stablecoin debt, ensuring solvency. Riskier collateral assets have higher liquidation ratios.
• Liquidation Penalty: This is the cost for allowing a vault (loan) to be liquidated, serving as a disincentive for leaving a vault unsafe.
• Required Collateral Ratio: This is the minimum collateral required when minting stablecoin, usually higher than the liquidation ratio to prevent immediate liquidation for volatile assets.
• Debt Ceiling: This is the maximum debt allowed for a particular collateral, used to control portfolio diversification and risk.

These risk parameters are dynamically managed to safeguard the solvency of the protocol and ensure the stability of the Acala Dollar. ACA holders can propose adjustments to these parameters through governance, which helps regulate the stablecoin's price and risk profile.

Acala Token's risk score is considered moderate, indicating that it is a relatively moderate risk investment. This assessment is based on factors such as the amount of money required to shift its price over a 24-hour period, recent changes in volume and market capitalization, and other market metrics.

• Ruitao Su: Co-founder and CEO of Laminar, a synthetic asset and margin trading platform. He has a Bachelor of Commerce from the University of Auckland and founded Less Code Limited, an award-winning software development studio.
• Bette Chen: Co-founder and COO of Laminar. She studied software engineering at the University of Auckland and holds a Master of Business Administration. She has experience as a project manager and business analyst.
• Bryan Chen: Co-founder and CTO of Laminar. He studied computer software engineering at the University of Auckland and is a software engineer experienced in both front-end and back-end development.
• Fuyao Jiang: Founder of Polkawallet, the mobile wallet for the Polkadot ecosystem. He was one of Polkadot’s earliest developers and community builders.