Equilibrium to integrate Acala to bring the aUSD stablecoin to its ecosystems on Polkadot and Kusama. The integration supports Equilibrium’s lending, borrowing, staking, and cross-chain earning services through aUSD into the Genshiro ecosystem on Kusama and soon in the Equilibrium ecosystem on Polkadot. aUSD will facilitate cross-chain trading and additional services to support features of several Equilibrium core products.
Equilibrium is a DeFi platform on Polkadot supporting digital asset trading and borrowing by combining a money market with an order book-based DEX to help solve existing DeFi limitations.
Equilibrium has identified four crucial areas it plans to address using its platform:
- The market’s inefficient approach to liquidation
- Excessive over-collateralization
- Fragmentation of DeFi liquidity
- A complicated user experience
Furthermore, central to Equilibrium’s problem-solving solutions is liquidity, ensuring traders have access to the digital assets they require. Through its services of lending, borrowing, as well as staking, and cross-chain trading interactions, Equilibrium plans to generate enough liquidity to address the efficiencies highlighted above.
Why Acala and aUSD
Moreover, the core of Acala’s services is aUSD –a decentralized, over-collateralized stablecoin powering the DotSama (Polkadot and Kusama) ecosystem. The aUSD also enjoys extensive cross-chain fungibility, making it a practical option for platforms seeking to improve their liquidity like Equilibrium. aUSD’s peg to the US Dollar and backing from several assets creates protection from volatility, often customary in several crypto assets.
aUSD facilitating Equilibrium DeFi functions
Equilibrium’s ecosystem includes a money market, stablecoin swap AMM, an on-chain order book, a DEX, and market-making pools, all of which require liquidity. aUSD’s presence in Equilibrium will facilitate liquidity, among other advantages, after its integration.
Users should expect the following benefits:
- Raising liquidity through borrowing aUSD
Enabling borrowing aUSD from Equilibrium’s money market helps users get additional working capital without the need of selling their volatile portfolio of crypto assets.
- Token Swaps
aUSD’s integration will enable Equilibrium’s native token swapping with aUSD, creating access to a broader market for Equilibrium users.
- DEX Trading
Borrowing and trading digital assets become simple with a stablecoin. Volatile tokens can deter lenders and borrowers from engaging in Equilibrium’s services; however, aUSD provides a practical reference to determine volatile asset prices.
- Stablecoin swaps
As Equilibrium is running an ‘official’ implementation of the Curve’s automated market maker for low-slippage swaps of stablecoins, ecosystem users will be able to swap aUSD for major stablecoins like USDT back and forth on Equilibrium.
Increased Utility and User base
aUSD serves as the default routing asset and means of exchange in the Polkadot and Karura ecosystems. Furthermore, Equilibrium’s integration supports aUSD’s target by broadening its utility and user base, facilitating a flourishing DotSama ecosystem. The collaboration will also result in Equilibrium’s growth through connections to other protocols via aUSD.
- Increased Staking Options
aUSD’s integration allows Equilibrium users to earn by staking aUSD into Equilibrium’s liquidity pools. The aUSD owners can also leverage their assets to borrow other cryptocurrencies from Equilibrium through its money market.
Acala and Equilibrium’s partnership provides a synergistic foundation for both platforms through aUSD and the cryptocurrency financial services offered on Equilibrium. Equilibrium users should expect deeper liquidity pools with better user benefits following aUSD’s integration.
Acala is a decentralized finance network powering the aUSD ecosystem. The core product, Acala USD, is a decentralized, multi-collateral, as well as crypto-backed stablecoin serving as the native stablecoin of the Polkadot ecosystem.
Equilibrium is a one-stop DeFi platform on Polkadot that allows for high leverage in trading and borrowing digital assets. It also combines a full-fledged money market with an order book-based DEX. In addition, $EQ is the native utility token that is used for communal governance of Equilibrium. Meanwhile, xDOT is a liquid and tradeable wrapped DOT that unlocks the liquidity of DOT locked in parachain auctions and delivers multiple crowd loan bonuses on Polkadot.