Dear Equilibrians, we are excited to share another ecosystem update that will enhance your DeFi experience. Equilibrium will integrate with Acala and Karura on the Polkadot and Kusama networks to bring the aUSD stablecoin to our ecosystem!
Acala’s aUSD is the decentralized stablecoin of the Polkadot ecosystem, which helps users build applications, trade, and facilitate liquidity provisions for greater yield and functionality. Our technical integration with Acala will be implemented through the XCM interaction protocol. This development will enable driving assets between platforms through cross-chain composability and especially benefit from aUSD’s native interoperability.
Moreover, this integration means Acala and Karura’s native assets will be compatible with Equilibrium product. These assets include:
- KAR, ACA, aUSD, LCDOT, LDOT, and LKSM
We’re particularly excited about the availability of aUSD in the Equilibrium ecosystem. This decentralized, over-collateralized stablecoin maintains a peg to the US Dollar, and is backed by multiple crypto assets such as DOT and KSM. aUSD creates more opportunities for our uses to power liquidity, economic activity, and utility within the community!
Liquidity Bootstrap Event
Our liquidity mining program utilizes our native assets, EQ and GENS (Equilibrium and Genshiro, respectively ). Through our Acala integration we’ll introduce a dedicated liquidity bootstrap event that will aim to bootstrap liquidity pools of Acala’s native assets on our platform.
These bootstraps are essential to our ecosystem. For Equilibrium and Genshiro to function to their full capacity, plentiful liquidity is necessary. As such, support from the community is critical. We are planning to conduct joint bootstrap events with every partner we are integrating via XCM with the aim of maximizing community involvement. .
aUSD use cases on Equilibrium and Genshiro
Money Market
The addition of ACA/KAR/LCDOT/aUSD/LDOT/LKSM means incorporating these assets into our money market. Users will be able to earn on staking these assets in our liquidity pools or collateralize them to borrow working capital or other assets they need.
aUSD integration to the money market will have a positive impact on user trading experiences. Previously, DeFi protocols in other blockchain ecosystems that integrated decentralized stablecoins into their MM have proven synergetic. The MakerDAO and AAVE integration is a prime example.
When DeFi is in high demand, stablecoin borrowing rates often rise as traders try to cover their positions. However, these rate spikes negatively affect borrowers in terms of stablecoin loan costs. In the example of MakerDAO, the AAVE integration helped stabilize DAI interest rates. Rates became more predictive,ultimately giving users more security.
Following our Acala integration, we would like to create the same opportunities for aUSD users on our platform. Also, holders of other native Acala assets can take advantage of low collateral requirements on our money market and earn yield on staking their holdings in its liquidity pools.
Stablecoin swaps with minimal slippage
Acala’s integration creates a more dynamic and interactive market for aUSD users. Thanks to our Curve implementation, infinitesimal slippage swaps will become available for aUSD on our platform.
We’re planning to open a dedicated 4pool that will include aUSD, EQD, USDT, and USDC. As such, holders of aUSD will be able to convert aUSD to other major USD-pegged stablecoins with convenience and minimal slippage
Orderbook DEX trading
Within our orderbook-based DEX, KAR and ACA holders will be able to collateralize them for margin trading while traders will be able to open short or long positions in these assets.
Another important use case will be a dedicated trading section for aUSD trading pairs. As such, volatile assets on our DEX will be also be quoted in aUSD, providing a easy snapshot of asset prices.
LCDOT/DOT swaps
There are a few liquid DOT wrappers in the Polkadot ecosystem that help crowdloan participants enjoy the liquidity of their DOT tokens while the DOT is locked during parachain auctions. The most popular wrappers are xDOT by Equilibrium, cDOT by Parallel, and LCDOT which Acala supporters have received on each DOT staked in Acala’s crowdloan.
LCDOT holders will have an opportunity to swap their tokens for DOT on Equilibrium. Our Automated Market Maker (AMM) enables a fair and efficient swapping process. .
Integration of Acala and Equilibrium is one of many exciting additions and innovations in the DotSama ecosystem. None of this is possible with the support from our community. Make sure you subscribe to us on your preferred social media platform, so you never miss an update.
About Acala
Acala is a decentralized finance network powering the aUSD ecosystem. The core product, Acala USD, is a decentralized, multi-collateral, crypto-backed stablecoin serving as the native stablecoin of the Polkadot ecosystem. Acala’s Ethereum-compatible blockchain has built-in DeFi protocols for application developers to leverage, including a trustless staking derivative (liquid DOT — LDOT), a decentralized exchange, and the EVM+, a hybrid EVM offering fully Ethereum-compatible development environment plus full compatibility with Substrate.
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About Equilibrium
Equilibrium is a one-stop DeFi platform on Polkadot that allows for high leverage in trading and borrowing digital assets. It combines a full-fledged money market with an orderbook-based DEX. EQ is the native utility token that is used for communal governance of Equilibrium. xDOT is a liquid and tradeable wrapped DOT that unlocks liquidity of DOT locked in parachain auctions and delivers multiple crowd loan bonuses on Polkadot.
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Equilibrium Integrates With Acala to Bring the aUSD Stablecoin to its Ecosystem was originally published in Equilibrium on Medium, where people are continuing the conversation by highlighting and responding to this story.
