, along with an initial nine Polkadot parachain teams and several supporting venture funds, has launched the $250 million aUSD Ecosystem Fund to support early-stage startups building applications with strong stablecoin use cases on any Polkadot or Kusama parachain.
The fund participants are seeking Solidity or Substrate-based applications driving yield or utility for aUSD, including money markets, DEXs, derivatives, asset management, DAOs, payments, and other use cases.
The four Acala co-founders (Bette, Bryan, Ruitao, and Fuyao) set out over three years ago in Auckland, New Zealand, to build a DeFi-focused parachain in the Polkadot ecosystem after being stifled by Ethereum scaling challenges and evaluating other options such as Cosmos and ETH2.
The idea for Acala started with the anticipated need for a native, decentralized, multi-chain stablecoin to serve as the foundational ‘oil’ to operate the would-be economy that Polkadot was sure to enable.
The team landed on an over-collateralized, crypto-backed, decentralized stablecoin model due to its proven and reliable mechanism.
An ecosystem of hundreds of connected blockchains needed a safe, reliable, and stable currency to power its economic activity.
In addition to a strong stablecoin, the team also anticipated the need for unlocking liquidity to grow the Polkadot economy with healthy debt, as any healthy economy needs.
Some of DOT’s primary use cases are staking and crowd loans, but by simply locking DOT away, those DOT are not able to be leveraged in the DOT economy.
Economies of any nature need healthy debt in order to grow. In order to enable a more vibrant Polkadot economy, aUSD enables users to unlock liquidity from their reserve assets, such as DOT, KSM, ACA, KAR, and cross-chain assets like parachain tokens, BTC, or ETH. These reserve assets can be collateralized and used to mint aUSD to earn yield while maintaining ownership of the reserve assets.
Three years later, on February 9, 2022, aUSD was launched and Acala’s entire core team and community are now driving towards the common goal of aUSD growth.