What Is Acala Dollar(AUSD)? Complete Guide & Review About Acala Dollar

What Is Acala Dollar(AUSD)?

The Acala Dollar USD (aUSD) stablecoin protocol enables a decentralized, cross-chain stable currency that serves as the native stablecoin of the Polkadot and Kusama ecosystem. This is minted from a variety of reserve assets. This allows holders of the reserve assets to earn, spend, trade, and access other services without price volatility while retaining ownership of their reserve assets.

Acala USD is pegged to the US Dollar. aUSD can be trustlessly integrated by any blockchain connected to Polkadot or Kusama, as well as applications deployed on those chains. aUSD can also be integrated cross-chain on any other connected blockchain network.

Anyone can mint aUSD using accepted reserve assets, and each aUSD is backed by a surplus value of reserve assets (collateral assets). The reserve assets are also cross-chain by nature, which can include Polkadot native assets (DOT and DOT derivatives), KSM and KSM derivatives like LKSM, Acala’s native token ACA, and Karura’s native token KAR. In the future, the protocol can also accept parachain assets and cross-chain assets like Bitcoin (BTC) and Ether (ETH) as collateral assets if they meet the risk requirements and are accepted via Acala governance.

Important Points Table Of Acala Dollar

How to Buy the Continental & Trade On Exchange?

Assets

Acala USD (aUSD):

The Acala Dollar stablecoin that is pegged to the US Dollar. Minting aUSD is trustless and done by over-collateralizing with a Collateralized Debt Position (CDP). aUSD is censorship resistant, decentralized, and cross-chain in nature and serves as the native stablecoin of Polkadot and Kusama.

Reserve Assets:

DOT, LDOT (Liquid Staking DOT powered by Homa Protocol) and ACA are default reserve assets. New cross-chain assets can be included as reserve assets upon assessment by Acala on-chain Financial Committee and Risk Assessor like Gauntlet.

Acala Token (ACA)

The native token of Acala Dollar. ACA is a reserve asset that can be used to mint aUSD. It’s also the governance token used to regulate stablecoin price by adjusting risk parameters such as interest rates. ACA is also the transaction fee token of the network and has a fixed supply of 1 billion ACA.

Why Mint aUSD

The aUSD stablecoin is decentralized, non-custodial and permissionless. aUSD allows users to hedge against price volatility, increase exposure of assets from multiple blockchains, and use the minted/borrowed aUSD trustlessly on multiple blockchains.

Yield & Liquidity for Reserve Assets:

while maintaining ownership of assets e.g. DOT, users can collateralize to borrow aUSD to hedge volatility, pay for goods and services, or access services without price exposure. For examples, users could provide liquidity to a stablecoin pool, use a stablecoin savings product, or purchase an NFT.

Increased Exposure with Yield:

Traders can use yield-bearing assets such as LDOT (Liquid Staking DOT powered by Homa Protocol) as collateral to multiply exposure of the underlying asset while earning staking APR.

Use as Medium of Exchange:

Users can use aUSD to pay for transaction fees on Acala and Karura networks, and projects can use it as a quote asset for listings. aUSD can also be used for payments and on-and-off ramps as it integrates with more partners.

A Decentralized, Multi-collateral, Crypto-backed stablecoin

Stable

Pegged to one dollar. 1 aUSD = 1 USD.

Censorship-Resistant

Backed only by decentralized assets in Collateralized Debt Positions (CDP).

Multi-Collateralized

Backed by cross-chain & native parachain assets: DOT, KSM, ACA, KAR, BTC, and ETH.

Secure & Efficient

Liquidations powered on-chain with guaranteed oracle price feeds.

Natively Cross-Chain

aUSD can be transferred cross-chain to any parachain on Polkadot or Kusama.

Built by developers, for developers.

Acala Dollar Funded by the Web3 Foundation, the aUSD stablecoin is the core product of Acala, the first parachain to earn a slot on Polkadot. Developed by the top Substrate contributors, aUSD is the native decentralized stablecoin of the Polkadot and Kusama ecosystem.

Why teams are integrating aUSD

Yield & Liquidity for Reserve Assets

Release liquidity from reserve assets to earn yield while maintaining ownership. DOT, KSM, ACA, and KAR are reserve assets, while parachain tokens, BTC, and ETH are on the way.

Polkadot’s Default Routing Asset

As the native decentralized stablecoin of the Polkadot and Kusama ecosystem, aUSD will provide a universal trading pair, routing to all assets in the ecosystem.

Trustless Transferability

Acala Dollar Leverage aUSD in your DApp on any parachain without wrapping or bridging to ensure your DApp is secure and trustless.

Substrate & ERC20 Compatible

aUSD can be integrated seamlessly into Substrate-native DApps as well as EVM-compatible DApps on any parachain.