Key Takeaways
- Acala is a cross-chain interoperable Polkadot parachain that’s aiming to become crypto’s leading DeFi hub.
- Its ecosystem is centered around the decentralized, Maker-inspired, overcollateralized stablecoin, Acala Dollar.
- Acala is built using Polkadot’s Substrate framework, meaning certain applications can be built into the chain instead of on top of it.
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Acala Network is an Ethereum-compatible Polkadot parachain aspiring to become an all-in-one DeFi hub for Web3. Its ecosystem is centered around the Acala Dollar (aUSD) stablecoin and hosts an array of financial applications, including a built-in decentralized exchange and a liquid staking service for native tokens of Proof-of-Stake based chains.
Acala Explained
Acala Network is a scalable, Ethereum-compatible DeFi-optimized platform natively interoperable with the entire Polkadot ecosystem.
To understand Acala’s value proposition, it’s worth highlighting that the project inherits most of its advantages over other Layer 1 protocols by virtue of being built on Polkadot using Substrate. The Polkadot network can be described as a scalable, heterogeneous, multi-chain ecosystem with a so-called bedrock “Relay Chain” at its center. Where most other Layer 1 blockchains are designed with varying degrees of generality concerning potential applications, the Polkadot Relay Chain has no inherent application functionality at all. Instead, it is an uncomplicated chain that serves as the foundational security layer for a network of interconnected, interoperable blockchains.
In other words, the Polkadot Relay Chain can be thought of as a Layer 0 framework that hosts and connects an expanding, parallelized network of either generalized or application-specific Layer 1 blockchains called parachains. These are modular and easily customizable independent blockchains that can have unique architectures, tokenomics, and governance structures. This is where Acala’s moat lies—it’s a scalable, high-throughput parachain that supports forkless upgradability and custom optimizations.
While there are hundreds of DeFi applications on dozens of different Layer 1 chains, they’re all theoretically limited in their capabilities because they are hosted on generalized chains. In these cases, decentralized application developers must adapt to the constraints of their particular environments. If they’re building DeFi apps on Ethereum, for example, there are certain things that their protocols will and won’t be able to do because of how Ethereum is designed.
Acala turns this principle on its head. Instead of the applications adapting to the constraints of fixed, generalized blockchains, Acala can adapt to the needs of the applications by continually evolve to become more application-specific. Acala’s Chief Growth Officer Dan Reecer sat down with Crypto Briefing to discuss the project, and he explained how the network is geared toward DeFi. He said:
“Because…
Read More: cryptobriefing.com