Acala announced integration with Anchor Protocol to enhance decentralized stablecoin space of Terra & Polkadot ecosystems
Acala, the Ethereum-compatible DeFi protocol, has announced a partnership with Anchor to advance the decentralized stablecoin space of the Terra and Polkadot ecosystems.
Acala, Anchor join forces to unite Terra and Polkadot DeFi ecosystems
Following Wormhole integration plans, both parties are set to increase liquidity and profitability opportunities for aUSD and UST by acting as gateways to Polkadot and Terra’s decentralized finance ecosystem.
Initially, Kusama-based Karura and associate Acala will support Ancho’s expansion of collateral options for UST co-stable with Liquid DOT (LDOT) and Acala’s yield-bearing liquid staking derivatives – Liquid KSM (LKSM).
Accordingly, the entities will focus on working together to maintain deep pools of liquidity for aUSD and UST on Acala. This is expected to act as a gateway to the Polkadot ecosystem for UST users. The duo will also work on more integration and deployment in the Acala and Terra ecosystems.
In addition, users of the Polkadot and Kusama networks will be enabled to access Anchor profits with the help of their LKSM and LDOT. The first step to achieving this is to transfer their liquid staking assets to Terra via Wormhole’s cross-chain bridge platform. The user’s LDOT or LKSM can then be offered as collateral to borrow UST on Anchor. The release stated, “By doing so, the user then earns ANC incentives for borrowing and can deposit their UST on the Earn side to earn a stable yield. With this new use case for LDOT and LKSM, a whole new group of users from Dotsama (Polkadot and Kusama) will be introduced to the Terra ecosystem.”
In the future, Acala and Anchor plan to create UST/aUSD pools to enhance liquidity for aUSD and UST. The pools will initially be developed on Acala before scaling across multiple parachains and layer 1. The focus will also be on growing the decentralized stablecoin space together.
As AZCoin News reported, Acala announced the launch of a $250 million aUSD Ecosystem Fund last month. The main purpose is to support new startups specializing in building applications with use cases for Acala’s stablecoin on any Polkadot or Kusama parachain.
The focus is also on expanding both ecosystems through increased cross-chain activity and aUSD growth. The fund was established with the cooperation of eight Polkadot parachain groups and many supporting venture funds.
Read more:
- DeFi-Optimized Polkadot Parachain Acala Launched A $250 Million “AUSD Ecosystem Fund,” ACA Up To 8%
- Acala And Karura Have Joined Wormhole Ecosystem Of L1s