Anchor Protocol And Acala Integrating To Unite Terra And Polkadot DeFi Ecosystems And Grow Decentralized Stablecoin Market
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.
Terra UST — Decentralized, censorship-resistant money for the internet
UST is a decentralized, algorithmic stablecoin built on the Terra blockchain. UST yield on Anchor Protocol is stable, powered primarily by staking returns from multiple proof-of-stake assets that users provide as collateral. Anchor offers low-volatility yields on Terra stablecoin deposits by lending to borrowers who deposit PoS assets as collateral and enjoy access to liquidity services via UST.
Polkadot and Kusama users will soon be able to access Anchor yield using their LKSM and LDOT. This will be done by first transferring their liquid staking assets to Terra via Wormhole, then providing their LDOT or LKSM as collateral to borrow UST on Anchor.
aUSD — The native decentralized stablecoin of Polkadot and Kusama
aUSD uses over-collateralization and crypto-backing to maintain its peg. aUSD’s protocol mints a stable currency from a basket of reserve assets. This enables people to transact, trade, and facilitate services using aUSD without price volatility, and, if desired, while retaining ownership of their reserve assets like ACA, DOT, KAR, KSM, DOT and KSM derivatives, parachain assets, and assets bridged from other consensus networks like BTC, or ETH. Decentralized stablecoins will also be eligible reserve assets for aUSD as long as they are accepted by Gauntlet and pass a governance vote.
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.
