Acala (ACA)

DeFi Platform and Financial Services

Acala is a cross-chain decentralized finance (DeFi) hub built on the Polkadot network. It allows users to stake, swap, borrow, lend, and earn through smart contracts and protocols. It offers an alternative to Ethereum with better scalability and lower fees, powered by its stablecoin, Acala Dollar (aUSD), which is pegged to the US dollar.

Native Token (ACA) Uses

The ACA token is used for paying transaction fees, stability fees, and penalty fees. It also serves as a governance token, allowing holders to vote on network upgrades and risk adjustments. Additionally, ACA can be staked to earn rewards and act as a mitigation tool in case of protocol shortfalls.

Cross-Chain and Liquidity Features

Acala supports cross-chain asset transfers within the Polkadot ecosystem, enabling users to use cryptocurrencies from different blockchains as collateral or for swaps without wrapping. It includes a decentralized exchange (AMM DEX) and a Universal Asset Hub for managing multichain liquid staking tokens.

Developer and Community Tools

Acala’s platform is EVM-compatible and highly customizable, making it easy for developers to build DeFi applications. The network also uses tools like SubQuery to provide on-chain data and transaction history for users and developers.

Treasury and Sustainability

Acala has built an on-chain treasury to ensure self-sustainability and uses auction mechanisms to lease parachain slots on Polkadot. The network focuses on maintaining liquidity, security, and governance through community participation and staking mechanisms.

Advantages of Acala

• Acala is a cross-chain DeFi ecosystem built on Polkadot, leveraging its layer-1 blockchain features and security through nominated proof of stake.
• It offers a Universal Asset Hub supporting multichain liquid staking tokens like liquid DOT (LDOT), enabling users to stake DOT and earn rewards.
• The platform integrates decentralized finance (DeFi) and centralized finance (CeFi) solutions, aiming to bridge crypto assets with real-world assets for sustainable liquidity.
• Acala provides an automated market maker (AMM) decentralized exchange and an app platform that is EVM-compatible and customizable.
• The network supports hybrid finance (HyFi), combining DeFi and CeFi infrastructures.
• Acala’s native token, ACA, is used for transaction fees, governance, staking, and as a contingency against collateral price drops.
• The network is secured by Polkadot and serves as a liquidity gateway for Polkadot parachains and other blockchains.
• Acala has a fixed supply and a self-sustaining on-chain treasury, contributing to token stability.
• It supports cross-chain swaps and asset minting, including stablecoins pegged to the US dollar (aUSD).
• The platform benefits from Polkadot’s shared security and interoperability with Ethereum and other blockchains.

Disadvantages of Acala

• It is unlikely to overtake Ethereum due to Ethereum’s first-mover advantage and improvements in Ethereum 2.0.
• The project’s success is heavily dependent on the adoption and performance of the Polkadot network.
• Acala’s multi-chain nature makes it sensitive to changes in international regulations, especially in the US and Europe.
• The Acala Token market is relatively small and volatile, with price movements influenced by large holders ("whales") and market conditions.
• As a newer platform, it is still developing and expanding its ecosystem, which may affect short-term stability and adoption.
• Some exchanges require identity verification before trading ACA, which may be a barrier for some users.

Founders of Acala

The founders of Acala are Bette Chen, Bryan Chen, Fuyao Jiang, and Ruitao Su. They come from backgrounds in blockchain technology, finance, and software engineering. Fuyao Jiang is also the founder of Polkawallet, a mobile wallet for the Polkadot ecosystem. Ruitao Su is co-founder and CEO of Laminar, a synthetic asset and margin trading platform. Bryan Chen serves as Co-Founder and CTO at Acala. Bette Chen is a co-founder involved in both Acala and Laminar.

Institutional Investors

Acala has 28 institutional investors including KR1, Spark, Digital Currency Group, Figment Capital, Coinbase Ventures, Alliance, and Pantera Capital. Other notable investors include Altonomy, Andromeda Capital, Atesis Capital, Blockchain Ventures (CVC), Block Infinity, 1confirmation, Arrington XRP Capital, ParaFi Capital, Coinfund, and Spartan Capital.

Funding Rounds

Acala has raised around $7 to $8.5 million in early funding rounds, including Seed and Series A rounds led by Pantera Capital and Polychain Capital. The Web3 Foundation also awarded Acala multiple grants to support its development.

Background

Acala was founded in 2019 and is headquartered in Singapore. It is a decentralized finance platform built on the Polkadot ecosystem, aiming to provide cross-chain liquidity and DeFi services.

Halal Status

Yes, Acala is generally considered halal. It has a "Comfortable" halal rating from Practical Islamic Finance, indicating it aligns with permissible activities in Islamic finance.

Reasoning

Acala operates as a decentralized finance (DeFi) platform focused on actual asset exchange, decentralized stablecoins, and staking derivatives without involving interest (riba) or impermissible activities. Its core functions provide technological utility and facilitate asset liquidity within the Polkadot ecosystem, which is viewed as compliant with Islamic finance principles. However, some lending features may require individual consideration, and no formal Shariah certification is publicly known yet.