Want To Know About Acala & Karura?, Look No Further Than This Article

Acala

  • Acala is the all-in-one DeFi hub of Polkadot to help you stake, swap, borrow, lend, earn and more — all with micro gas fees.
  • Acala is an Ethereum-compatible platform for financial applications to use smart contracts or built-in protocols with out-of-the-box cross-chain capabilities and robust security.
  • The platform also offers a suite of financial applications including a trustless staking derivative (liquid DOT), a multi-collateralized stablecoin backed by cross-chain assets (aUSD) and an AMM DEX, all with micro gas fees that can be paid in any token.

The Below Video Is A Good Introduction To Acala

Acala Foundation

  • The Acala Foundation was created to support up-and-coming projects that are integrated with Acala applications such as aUSD, staking liquidity and the Acala decentralized exchange (DEX).
  • Also, all projects working in conjunction with the Acala foundation can take advantage of marketing collaborations, sharing of technological innovations and much more.
  • The Acala Foundation engages with projects under the Acala umbrella and identifies potential candidates for collaborations and integrations.
  • With a team of esteemed backers and industry-leading professionals, the Acala foundation is dedicated to the long-term sustainable growth of the Acala network.

Acala Mandala

  • Acala Mandala is the home to Acala’s decentralized finance (DeFi) suite of applications and protocols.
  • Still in testnet, Acala Mandala is open-source and permissionless, meaning anyone can interact with the applications.
  • However, it is worth noting, Polkadot.js must be installed to interact with Acala Mandala. Polkadot.js is free and can be downloaded as a browser extension and implemented within seconds.

Acala EVM

  • Launched in February 2021, the custom-built Acala Ethereum Virtual Machine (EVM) is a Polkadot-native Ethereum-compatible virtual machine designed to optimize and maximize the full potential of Substrate.
  • The Acala EVM provides Substrate, Solidity and Web3 developers with a full-stack experience (Acala+EVM+Substrate+WASM) using just a single wallet.
  • The Acala EVM offers a fully composable DeFi environment, meaning decentralized applications (dApps) deployed in the Acala EVM can interact seamlessly with cross-chain assets.
  • Also, the Acala EVM allows developers to use an “on-chain automatic scheduler” for recurring payments such as subscriptions.
  • Moreover, Acala EVM is created for developers to “Bring your own gas.”
  • Both cross-chain and native tokens integrated through Acala can be listed on a decentralized exchange (DEX) hosted by Acala EVM (with governance approval), or be used for transaction fees on the Acala network.
  • The Acala EVM coupled with no-fork upgrades means any new Substrate pallet can integrate with Acala with zero friction.

The Acala Token (ACA)

  • The native ACA token has two primary functions within the Acala network.
  • Firstly, ACA serves as a utility token across the Acala platform.
  • ACA is used for transaction fees and smart contract-based applications that operate across the Acala ecosystem. Furthermore, the ACA token is used in staking and other fundamental network activities.
  • Secondly, the Acala token (ACA) is used for the governance of the Acala network.
  • Holders of the ACA token are granted voting rights. This allows token holders to vote on proposals regarding Acala Treasury governance, the election of council members, risk management and upgrades to the network.
  • Moreover, Acala token holders can vote on adjustments to key risk parameters of the Acala network and the decentralized applications (dApps) that make up the Acala ecosystem.
  • These parameters include collateral type proposals, stability fees and liquidation ratios.

Acala Dollar (aUSD)

  • The Acala Dollar (aUSD) is a multi-collateralized stablecoin that powers the native Acala decentralized applications (dApps) and decentralized finance (DeFi) experiences.
  • These include lending, borrowing, interest-earning and synthetic asset trading.
  • The aUSD token is equal to one US dollar. This makes it a useful trading pair and a reliable store of value.
  • Acala network offers multiple ways to leverage returns with aUSD using the Acala Mandala DeFi suite.

Stable Currency

  • Multiple-asset-backed decentralized digital currency without volatility.
  • Stable by design, aUSD enables borderless and low-cost value transfer globally across all connected blockchains.

Powered By Polkadot

  • Acala Network is secured under Polkadot’s shared security model, ensuring high resilience and forkless upgradability.

Staking Liquidity

  • Release staked assets (DOTs) as fungible & liquid assets (L-DOTs), extracting the derivative value of staked assets to fuel DeFi without sacrificing the security of the whole network.

Influence By Ownership

  • A decentralized network governed entirely by Acala Network Token (ACA) holders to achieve a transparent future, a future based on more truth and less trust.

Acala Apps

  • Borrow- Borrow aUSD and manage outstanding loans.
  • Earn- Earn interest on aUSD.
  • Trade- Trade tokens on Decentralized Exchange.
  • Govern- Participate in governance by ACA holders.

Token Economy

  • This paper outlines key utilities of the ACA tokens, its distribution model to support continuous R&D and gradual decentralization and explores economic models to participate in parachain auctions over multiple periods under varied circumstances.

https://github.com/AcalaNetwork/Acala-white-paper/blob/master/Acala_Token_Economy_Paper.pdf

Acala Whitepaper

  • This paper introduces and elaborates on two decentralized protocols that enable cross-chain financial stability and liquidity on the Polkadot network, the Honzon Stablecoin Protocol and the Homa Tokenized Staking Liquidity Protocol.

https://github.com/AcalaNetwork/Acala-white-paper/blob/master/Acala_Whitepaper.pdf

Decentralized Sovereign Wealth Fund (dSWF)

  • Proposed by Dr. Antonia Chen, the Acala decentralized Sovereign Wealth Fund (dSWF) is a long-term economic funding model using multi-collateralized backing to ensure the future development of the Acala network.
  • The aim of the dSWF is for Acala to become a self-sustainable network.
  • This means that control of the network is in the hands of token holders, not venture capitalists (VCs).
  • Using foreign cryptocurrency reserves, the Acala dSWF will help with community incentives, research and development and securing a parachain slot for the Acala network.

https://github.com/AcalaNetwork/Acala-white-paper/blob/master/Building_a_Decentralized_Sovereign_Wealth_Fund.pdf

Karura

  • Meet Karura’s all-in-one DeFi platform to help you swap, borrow, lend, earn and more, all with micro gas fees.
  • Karura is the all-in-one DeFi hub of Kusama.
  • Founded by the Acala Foundation, Karura is a scalable, EVM-compatible network optimized for DeFi.
  • The platform offers a suite of financial applications including a trustless staking derivative (liquid KSM), a multi-collateralized stablecoin backed by cross-chain assets (kUSD) and an AMM DEX, all with micro gas fees that can be paid in any token.
  • By launching on Kusama, Karura can push the limits of what’s possible, giving the Acala Foundation team a place to launch bold new financial innovations.
  • Karura will access Kusama’s plug-and-play security while enjoying high-capacity processing speeds, micro-gas fees, and interoperability between multiple networks, all ultimately bridged to Polkadot.
  • Karura will deliver decentralized financial products and stable assets to Kusama’s entire ecosystem of networks.

Stay Liquid While Staking

  • Liquid KSM Staking
  • Stake your KSM for LKSM to earn rewards without sacrificing liquidity.
  • LKSM is unlocked and ready to trade, take out collateralized loans and provide liquidity for additional yield.
  • Stake any amount of KSM and unstake without the wait.

Perform Instant Cross-Chain Swaps

  • Trade with Karura’s trustless, cross-chain exchange, powered by an automated liquidity provisioning protocol.
  • Become a liquidity provider and earn in two ways, exchange fees from Karura DEX and stability fee profit sharing from the kUSD stablecoin protocol.

Earn More With The Karura Dollar

  • The Karura Dollar is a decentralized, multi-collateralized stablecoin backed by cross-chain assets.
  • Stable by design with value relative to the US Dollar, kUSD is the defacto stablecoin of Kusama.
  • Issue a self-serviced loan of kUSD or provide kUSD liquidity to the Karura DEX and earn rewards from trading volume.

Pay A Fraction Of The Gas In Any Token

Micro Gas Fees- Karura settles transactions for a fraction of the gas required on other networks.

  • Thanks to Kusama’s weight-based fee model, you can count on micro gas fees that vary only slightly by transaction complexity.

Accepted In Any Token- Pay your gas with virtually any token.

  • With Karura’s flexible fee tokens, you can settle transactions with KAR, KSM, LKSM, BTC ETH and more.

KAR Powering Karura

  • Transaction Fees- Powers the micro gas fees and smart contract execution.
  • Node Incentivisation- Incentivizes network nodes to monitor and relay messages to Kusama.
  • Governance- Empowers the community to vote, elect council members and drive the development of Karura.
  • Algorithmic Risk Adjustment- Auto-adjusts risk parameters such as interest rates or collateral ratio.
  • Pallet Deployment- Allows teams to deploy new Substrate pallets on the Karura blockchain by staking KAR.
  • Smart Contract Deployment- Enables teams to deploy new DApps and smart contracts on Karura’s platform after staking KAR.

KAR Tokenomics

  • KAR is a utility token with a fixed supply of 100,000,000.
  • The entire supply will be minted in the genesis block at launch.
  • Ticker- KAR
  • Relay Chain- Kusama
  • Inflation- 0%
  • Supply Profile- Fixed and deflationary