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Hello everyone.
It's already week seven of the season four in the Steemit Crypto Academy. The past six weeks have been awesome, as I learned so many things from the Professors in the Academy. Now, this post is written in response to Professor @allbert assignment. He taught "Polkadot ecosystem, the Ethereum’s Contender" and he explained the blockchain very well. I am going to be answering the questions given in the next paragraphs. Follow me closely.
Choose a Project, platform or service belonging to the Polkadot Ecosystem (Polkadot not permitted) and make a detailed post, which must comply with the following aspects:
1-Explain in your own words why you chose it and why do you think it is relevant to the world?
2- Description of the project and its platform. (Screenshots needed)
3- Functionalities and real-life applications. (Screenshots needed)
4- Future development and associated projects. (Screenshots needed)
5- Make a technical analysis of the token of the selected platform, then through your validated exchange account make the purchase of the token (15 USD as a minimum). Screenshots and an explanation of the procedure are required.
For this homework task, I am going to choose a project built on Polkadot. So, I am going to be talking on Acala Network. Let's begin.
ACALA NETWORK
Fig 1: ACALA
Image Source
1. Explain in your own words why you chose it and why do you think it is relevant to the world?
Acala Network is one of the projects built on Polkadot Ecosystem. It's a platform for decentralized finance (De-fi). Acala Network is a project that hosts an assemblage of financial application which uses interaction of chain, technology of smart contracts and robust security. Among other aims of the organizer of the project is building a stable coin, a decentralized digital currency for transferring value inside the Ecosystem of Polkadot.
Fig 2: Image Source
I chose this Acala Network because of the benefits. Firstly, Acala is a project which introduces De-fi (decentralized finance) to Polkadot Ecosystem. This led to improvement and advancement in the Ecosystem. Also, Acala Network acts as a para-chain on Polkadot Ecosystem. Furthermore, It is compatible with Ethereum. This means that, it's application can interact between two blockchains, Polkadot and Ethereum blockchains.
Acala Network is relevant to the world because of so many reasons. To start with, The Network has been a great help to developer of decentralized applications (DApps), in that they have built Ethereum compatible virtual machine which helps to build DApps written in Ethereum coding language and also all assets that are the same with ERC-20 tokens can be minted. Examples of these assets that are mintable are DOT, RentBTC, aUSD and ACA .
Furthermore, Acala Network has financial products. They are:
- Stable coin known as aUSD
- Stable derivatives known as L-DOT
- Automated market maker (AMM)
These are the products of Acala Network. People use them and enjoy them.
2. Description of the project and its platform. (Screenshots needed)
Acala Network is regarded as all in one decentralized finance. It is the first De-fi application that is built on the Polkadot. The network is created and developed by a group of people. These people are, Ruitao Su, Bryan Chen, Fuyao Jiang and Bette Chen.
It's a platform for decentralized finance which is built on Polkadot with set of protocols which provides benefits to the users, the developer of Dapps and advances the Polkadot ecosystem.
The objective of Acala Network include
- The network aims to create a platform with a stable coin where unlimited transfers could be made for the blockchains connected to the network with low fees.
- To have collateral from Polkadot and all other networks or project connected to it to attain great roof possible.
- To develop a very secure network with Polkadot.
- To be an open source type of De-fi.
- To be a stable coin network which can modify the fee schedule and keep the security.
Acala is created or built in a way to harness the security of the Polkadot and thereby having a secure network as a result of the security mechanism of the Polkadot it's connected to.
The native token of Acala Network is known as ACA. The token is used for various things on the Acada ecosystem. Transaction fee can be paid with ACA. ACA can also be used to pay stability fees as well as penalty fee in the time of liquidation. Users can also pay with aUSD which can also be exchanged with ACA.
The Network is a new project. The ICO started on August 30th 2021 and ended on the 3rd of Sept., 2021. The project is listed on the coinmarketcap but the price has is not yet listed.
Fig. 3: ACALA Token on CMC | coinmarketcap.com
ACA is a utility which is said to have 1, 000, 000,000 supply. According to research, the entire token would be minted during the genesis block at the time of launch.
The distribution of the entire supply is for four categories. The Community is 49.76% , funding the is 20.25 %, early backer is 18.33%, and backers is 11.66%
Fig 4: ACA Distribution
Image Source
See the overall break down in the screenshot below.
Fig 5: Community Breakdown
Image Source
3. Functionalities and real-life applications. (Screenshots needed)
In this part of the question, I am going to be talking about functionalities and real life application of Acala Network.
Acala Network provides different services to its users on the blockchain it's built, Polkadot. These services include lending, borrowing and staking. Acala provides all these at a very low or minimum gas fee, and the features are highly scalable. These products offered by Polkadot to Its users uses two major protocols. These protocol are, Homa and Honzon.
Now, let's talk about these protocols and how they function.
Homa Protocol
Home is a protocol for staking tokenized liquidity. Home is a protocol designed to provide solution to the issue of the tokenized assets that are staked but are said to have illiquidity. That's it solves the illiquidity of these assets. It's built as a protocol to tokenize all assets which are staked on the Acala Network.
This is done by developing what is known as L-asset which can be used as a leverage for investment as well as for use in Decentralized finance applications, which is like a type of of liquidity farming which Ethereum Defi Ecosystem practices.
Honzon Protocol
This is another type of protocol designed for the product and services on Acala Network. This protocol uses the Acala Network dollar which is pegged to the USD at a one/one ratio. This protocol is a stablecoin protocol. The inspiration of this protocol is through the MakerDAO. He's a pioneer of Defi in Ethereum ecosystem which is famous for its collateralized debt position (CDP). Let's see how this CDP works.
Fig 6: Honzon Protocol
Image Source
Below is an explanation of how collateralized debt position CDP works.
- The first step is that users will deposit Collateral.
The first thing to do when you want to use the protocol is to deposit your token or asset as a collateral. Different crypto or assets type cannot be used as a collateral when the user is creating CDP. This crypto or asset will be locked and staked as a collateral during the period of CDP.
- The next step is opening the CDP and borrowing Acala Network dollar, aUSD
This next step is where users borrow aUSD which must be equal or lesser than the amount he deposited for CDP. The amount they borrow must not be greater than the amount they borrow. The collateral will still be there until they pay back the amount they borrow in Acala Network dollar, aUSD.
- Then, the next thing I to repay the borrowed aUSD
After the close of CDP, the user must repay the aUSD he borrowed by depositing the same amount he borrowed in aUSD as well as the stability fee which can be in ACA or aUSD.
- Users requesting for his collateral
Then after paying the money the user borrowed and the stability fee, he can request for his collateral back. Then, Upon giving him his collateral, the CDP will be closed.
See the screenshot below for the illustration of this process.
Fig 7: Illustration of CDP
So, the main product and services that ACA la network offers, lending and borrowing through the Honzon Protocol and he staking through the home protocol are the major real life benefits which the Acala network offers. I have explained how this services are done which is their functionalities. Now, let's now see the future development of this platform.
4. Future development and associated projects. (Screenshots needed
Acala is a decentralized finance platform which aims at providing financial services and products to its users. The network just completed its ICO and it's still very new on the Polkadot network. But it has a lot of future development projects. Let's talk about some.
One of the projects that Acala network is being designed is dubbed karura network. It is an iteration Acala Network. This process is created to be De-fi Hub of the project called Kazuma. This projected is being designed and expected to advance the network. Although Acala network itself is still a new project, but the project is thought to be flourished.
Fig 8: Karura
Image Source
Another important future project of the ACA Network is that, the platform seeks to have as many as possible users which will be using their stable coins and thereby facilitating the transfer of the Acala stable coin, aUSD to different block chains.
Fig 9: Blockchains Connected Together
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Recently, Acala Network announced the launch of Acala Quest. The program is said to give more crowd loan and people will earn more reward. See the screenshot below.
Fig 10: Announcement of Acala Quests
Image Source
5. Make a technical analysis of the token of the selected platform, then through your validated exchange account make the purchase of the token (15 USD as a minimum). Screenshots and an explanation of the procedure are required.
The token, ACA of Acala Network project has not been listed in any cryptocurrency price tracking website. The ICO event of the project just took place between August and September.
Fig 10: Acala Token ICO Announcement Date
Image Source
Now, I tried to check different price tracking website such as coinmarketcap, Coingecko to see if the token is already trading, but it's not. Coinmarketcap says the ICO event has been ended. See the screenshot below.
Fig 11: Acala Token on coinmarketcap showing the ICO event has ended | coinmarketcap.com
Also, I searched the Coingecko website. The token has no value.
Fig 12: Acala Token on Coingecko showing no value | Coingecko.com
So since the token has not been given value and the it doesn't have chart, there's no way to do technical analysis and invest in it. I hope the developer of the great platform will work towards this as soon as possible.
Conclusion
There have been improvement of the blockchains. There are many blockchains which are built to solve some problems found in the old blockchains. Such is Polkadot blockchain. It's a blockchain which is very scalable and very secure. It's often regarded as the multi blockchain project which enable different blockchains to interact with one another.
Many projects are built on the Polkadot ecosystem. Some of these are, Kasuma, Ocean Protocol, Acala Network etc. I have dwelled extensively on Acala Network in this post. It's a decentralized finance platform which provides financial products and services for the users.
Thanks to Professor @allbert for bringing this topic up. I have learnt one or two things from the course. I look forward to seeing more lessons from you.
CC: @allbert
Written by @msquaretk