Anchor Protocol & Acala Integration
Acala is working with the team at Anchor, a savings and borrowing protocol built on the Terra blockchain, to grow the decentralized stablecoin space through a variety of integrations spanning the Terra and Polkadot ecosystems.
Acala and Karura, Acala’s Kusama-based parachain, will initially help expand Anchor’s collateral options for the UST stablecoin with Liquid DOT (LDOT) and Liquid KSM (LKSM), Acala’s yield-bearing liquid staking derivatives. The teams will also work together to stand up deep liquidity pools for aUSD and UST on Acala, serving as a gateway into the Polkadot ecosystem for UST users. The two teams will continue to build more integrations and deployments in the Acala and Terra ecosystems, using these initial integrations as a foundation.
Anchor will soon be integrating LDOT and LKSM as collateral assets in its protocol.
While enjoying the returns on staked DOT (~14%) and staked KSM tokens (~20%), Acala and Karura users will be able to utilize their liquid staking assets via cross-chain collateralization to access additional yield on Anchor. The subsequent issuance of UST can be deposited into Anchor to earn the platform’s current APY (~19%), further increasing yield. In an example, a user could stake their KSM on Karura to earn 20% and receive their liquid LKSM token, then send their LKSM to Anchor, deposit into Anchor to borrow UST, and then deposit their UST in the Earn side for an additional yield.
About Anchor
Anchor is a decentralized borrowing and savings protocol offering users UST loans and low-volatile yield on stablecoin deposits. The Anchor savings rate is powered by a diversified stream of staking rewards from major proof-of-stake blockchains, which support its stability relative to the volatility of money market interest rates. The Anchor community believes that a reliable source of yield in Anchor has the opportunity to become the reference interest rate in crypto.
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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