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Acala Coin Use and Value Explored

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Founded in 2019, Acala is a self-contained decentralised finance (DeFi) network built on and designed to facilitate the Polkadot ecosystem. It's native token is the Acala coin, ACA.

The project has been specifically optimised for DeFi use and is both scalable and Ethereum (ERC-20) compatible.

The project provides a vast array of cross-chain financial applications, which make it highly flexible and help to maintain consistent levels of demand. Users can trade with Acala Swap, issue self-certified loans through the Acala dollar stable coin (aUSD), access liquidity farming opportunities, and earn staking rewards through Liquid DOT staking (LDOT).

In the future, Acala coin (ACA) will be bridged to Ethereum and Bitcoin, as well as Compound Gateway, which was synonymous with the project's development.

This project is leading the way in developing hybrid crypto and fintech products alongside US fintech company Current and helping to bring DeFi yield opportunities to its three million US customers.

Tokenomics

ACA is the native token of the Acala network. There are currently some 613 million coins in circulation, which, at current prices, gives a market cap of just over $73 million. The max supply is set at 1,000,000,000 tokens, which are subject to a 0% rate of inflation with a fixed and deflationary profile.

ACA is available from a wide variety of cryptocurrency exchanges, but Binance proves to be the most popular, carrying 58% of ACA/USDT volume. KuCoin, Kraken, and Gate.io are other popular places to purchase the token.

The stand-out feature of Acala is the native stablecoin known as aUSD. As we mentioned above, the project is helping to drive the adoption of DeFi protocols through the use of the Polkadot ecosystem. aUSD can also be used on the Kusama network, ensuring even more stability in its mission to provide parity with the US dollar.

aUSD has been designed to be completely decentralised. It is multi-collateralised and backed by a series of cross-chain assets.

However, it is essential to differentiate between the Acala dollar (aUSD) and the Acala coin, which is the native token for the Acala platform.

At its genesis, the ACA token has been distributed democratically, with 49.6% of tokens allocated to community members. The remaining 50.24% has been split between Backers (11.66%), Early Backers (18.33%), and the Founding Team (20.25%).

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Benefits

The Acala coin (ACA) is the utility token that powers Acala, the DeFi hub of Polkadot. The token is used for various features, which we will look at here.

• ACA is used to pay transaction fees which form the lifeblood of validators on the network. Furthermore, the coin is used to incentivise nodes to monitor and relay messages across the Polkadot network.

• Acala coin holders are entitled to vote on crucial network issues that help drive the project's development. Token holders can also elect future council members.

• ACA is also used to auto-adjust risk parameters which drive interest rates and collateral ratio. Furthermore, any staked ACA can be used to deploy new Substrate pallets on the Acala blockchain.

Parachain auction

ACA has been earmarked to support early participants in the Polkadot parachain auction through the issuance of DOT. Once received, a portion of the chosen ACA will be unlocked and become transferable, with the remaining amount vested and slowly released over the duration of the parachain slot.

80% of any ACA resulting from the parachain auction will have a linear vest over the course of the parachain slot release, while 17% of the supply will be issued as rewards to supporters of the first parachain auction.

In short, this means that supporters will receive 3 ACA for every DOT contributed, although this number is set to increase depending on your level of involvement. 20% of ACA received from the parachain auction will be unlocked, liquid and usable within Acala's DeFi ecosystem.

Conclusion

As you can see, there are myriad ways in which holders of the ACA token can help contribute to and secure the network making Acala one of the most innovative and flexible DeFi ecosystems on the market today.

This project is a perfect example of a breed of new and exciting FinTech start-ups helping to create the bridge from the TradFi to the DeFi world.

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mark harridge author

Author: Mark Harridge

Mark Harridge first came across Bitcoin and began to use its peer-to-peer payment network in mid to late-2011. He quickly understood that this technology would change the world. Mark is passionate about crypto adoption, from a macro economic and institutional perspective, and the numerous factors that fuel the relentless march towards individual self sovereignty and the decentralised society of the future.

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