Cross-chain StableCoin platform based on Substrate — — Acala

Author: @qash0430
Original: https://medium.com/@qash0430/cross-chain-stablecoin-platform-based-on-substrate-acala-5697bc34d24

Acala — the world’s first decentralized open financial platform, aims to unite the Polkadot ecosystem to create an open financial framework. Acala consists of a stablecoin Honzon protocol that supports cross-chain multi-asset collateral and a Homa protocol that releases pledged asset liquidity. Acala aims to bring stability and improve liquidity to global crypto assets. Acala has received official funding support from the Web3 Foundation.

Since Polkadot was born, it has given the Internet a real sense of the interconnection of information and value, thereby achieving the scalability of value exchange. The current valuable exchange blockchain networks, such as Bitcoin, Ethereum, and other public Enterprise alliances and private blockchains all operate on their information islands, far from achieving value exchange and connection. Polkadot’s ability to share security models and cross-chain assets and information will bring a more open digital autonomous economic ecology, laying the foundation for technology and governance for truly open finance — a more fair and openly shared rather than privatized infrastructure.

Polkadot supports cross-chain information interoperability, making the stablecoin system based on the Substrate framework not only support cross-chain multi-asset mortgages, but also the system can interoperate with other public chains and alliance chains at the information layer. , IoT blockchain and Acala docking. Big data blockchain and enterprise alliance chain docking with Acala network, etc. Once the cross-chain information can be interoperated, DeFi will no longer just use the token as the core, but It is turning to value as the core, so that more possibilities for the DeFi ecosystem emerge and break through the bottleneck of the current application. Acala is at the cornerstone of this ecology.

The Acala team announced the establishment of Acala Consortium, the first global decentralized financial ecological alliance, which will become the open cross-chain financial infrastructure of the Polkadot ecosystem. The Acala network will bring new stability and liquidity to global digital currencies. The first step is to implement a multi-asset mortgage stablecoin platform with cross-chain functions based on Substrate, and use it on the Polkadot network through encryption to all public, alliance and private chains, greatly improving financial openness and reducing transactions and Trust cost.

Similar to most financial agreements, stable prices are based on the help of arbitrageurs or brick movers. When the price of aUSD deviates from the anchor price, someone will be willing to buy and sell arbitrage, and make a profit while stabilizing the price. Stop the price Too high is very easy, and the hard part is to prevent the death spiral from entering the Black Swan incident and make the price crash. Among them, the most important is the over-collateralization of high-quality assets, in order to ensure that these high-quality assets do not collapse substantially at the same time, which will bring a lot of instability. In the case of insolvency, the original currency ACA will be diluted and auctioned to make the bottom. This will allow the holders of ACA, that is, the owner of this network, to be willing to guarantee the stability of aUSD to the greatest extent. It will also adjust the liquidation rate and the highest borrowing rate based on the amount of assets mortgaged. This guarantees that even in the big bull market, At the same time, it will not allow too many loans with high potential risks. This mechanism can also avoid a large number of asset auctions in a short period of time and reduce the impact on the market.

I am very optimistic about Acala, and will continue to follow up on the new progress of this project.

Here is the official contact information:

Official websitehttps://acala.network

Twitterhttps://twitter.com/AcalaNetwork

Mediumhttps://medium.com/@AcalaNetwork

GitHubhttps://github.com/AcalaNetwork/Acala

Riot : https://riot.im/app/#/room/#acala:matrix.org

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