Acala
Binance Lists Altcoin Built on Polkadot (DOT), Plus An Additional Crypto Asset On Terra (LUNA)
The world’s largest crypto exchange has listed a new altcoin project in the Polkadot ecosystem, as well as another crypto asset based on Terra (LUNA). In a new announcement, Binance says it’s listing Acala (ACA), an Ethereum-compatible smart contract platform and Polkadot (DOT) parachain. Acala’s blockchain has built-in decentralized finance (DeFi) protocols for app developers […]
The post Binance Lists Altcoin Built on Polkadot (DOT), Plus An Additional Crypto Asset On Terra (LUNA) appeared first on The Daily Hodl.
Kraken Ventures Raises $65 Million to Invest in Web3, Defi, Blockchain Startups and Protocols
The independent investment fund led by Kraken alumni that’s focused on early-stage companies and protocols, Kraken Ventures, announced the successful closing of its first fund at $65 million. Presently, the fund holds positions in platforms like Hashflow, Pstake, Acala, Blockdaemon, Anchorage, and Messari. Kraken Ventures Reveals $65 Million Fund I LP There’s been an enormous […]Acala Welcomes SubQuery to Polkadot Parachain
Finance Redefined: Acala wins Polkadot parachain, and Iota set to launch Shimmer, Nov. 12–19
Acala was victorious in Polkadot’s first parachain auction, Iota announced its staking network, and Uniswap liquidity providers lose money — all coming to you in this week’s Finance Redefined.
Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.
Read on to discover why almost half of the liquidity providers on Uniswap v3 are losing capital due to impermanent loss.
What you’re about to read is the smaller version of this newsletter. For the full breakdown of DeFi’s developments over the last week, subscribe below.
Acala wins Polkadot’s debut parachain auction
Decentralized finance protocol Acala was announced as the winning project in Polkadot’s inaugural parachain auction this week, beating fellow competitor Moonbeam to the finish line with a seismic total of 32.5 million DOT ($1.28 billion) raised from 24,934 contributors.
Acala is a multi-functional DeFi platform built on Polkadot that enables developers to build smart contracts applications with cross-chain capabilities, as well as being compatible with Ethereum. Its top investors include Digital Currency Group, Polychain Capital and Alameda Research, among others.
In the case of Acala, all of the proceeds from the crowdloan initial coin offering are classified as “crypto debt” and, therefore, must be paid back by the project following the conclusion of the rental agreement.
With over 32M DOT contributed by over 81,000 community members, Acala has won the first parachain auction on @Polkadot!
— Acala - DeFi Hub of Polkadot (@AcalaNetwork) November 18, 2021
Thank you to everyone who took part in this historic event. (1/3) pic.twitter.com/CL2jCwA9Re
Related: DFG piles $12.6M into Astar Network’s Polkadot parachain bid
Iota Foundation set to launch staging network and reward token
The Iota Foundation, an open-source, nonprofit entity endeavoring to support the Iota ecosystem, announced the upcoming launch of a staging network, Shimmer, this week alongside an accompanying token asset, SMR.
Shimmer is a layer-one sandbox platform that will enable builders and developers to test the efficiency and compatibility of their decentralized applications within the DeFi and NFT space, prior to deployment on the Iota mainnet.
Expected to launch in early-2022, the network will also facilitate community governance confirmations for Iota’s large-scale network upgrades, including the upcoming programmable multi-asset ledger, smart contracts, full decentralization and sharding.
Related: Iota launches beta smart contracts to foster interoperability
Almost 50% of Uniswap v3 liquidity providers are in the red
A research report published this week by Topaz Blue and the Bancor Protocol revealed that almost half, 49.5%, of liquidity providers on Uniswap v3 have experienced financial losses due to impermanent loss, a common occurrence on automated market makers when supplying two-sided, volatile liquidity pairs.
An instance of this would arise if, for example, a user has supplied equal values of Tether (USDT) and Ether (ETH) in United States dollars to a liquidity pool and the price of ETH goes up.
This would mean that arbitrageurs — investors who often work in accordance with financial institutions to benefit from price discrepancies in the market — will remove ETH from the pool to sell at a higher price. This leads to a decrease in the U.S.-dollar value of the user’s position and, consequently, an impermanent loss.
The report suggested that, based upon current statistics, it may well be more profitable to simply hodl the market, as opposed to actively participating in liquidity services, stating:
“The user who decides to not provide liquidity can expect to grow the value of their portfolio at a faster rate than one who is actively managing a liquidity position on Uniswap v3.”
Related: Bancor releases no-liquidation lending with Vortex as AMMs continue diversification
Token performances
Analytical data reveals that DeFi’s total value locked has decreased 7.89% across the week to a figure of $160.47 billion.
Data from Cointelegraph Markets Pro and TradingView reveals DeFi’s top 100 tokens by market capitalization performed indifferently across the last seven days.
Avalanche (AVAX) secured the podium’s top spot with 30.11%. Curve DAO Token (CRV) came in second with 0.67%, while Maker (MKR) came third with 0.34%.
Analysis and hot topics from the last week:
- Airdrop rumors result in a swarm of activity on MetaMask Swap and Polygon
- The power of cheap transactions: Can Solana’s growth outpace Ethereum?
- ‘We want to build Minterest as a fairer financial system,’ says CEO Josh Rogers
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.
Acala wins first Polkadot parachain auction with over 32M DOT staked
The upcoming Polkadot DeFi hub raised nearly $1.3 billion in its token ICO from approximately 25,000 contributors.
On Thursday morning, Acala, a decentralized finance (DeFi) protocol operating on the Polkadot (DOT) network, announced it had won the first-ever Polkadot parachain auction.
Acala raised a total of 32.5 million DOT, worth roughly $1.28 billion, from 24,934 contributors via an initial coin offering (ICO) structured as a crowdloan. As the proceeds are classified as 'crypto debt,' Acala would eventually need to pay back the DOT it had solicited from investors. Users' DOTs are locked for the duration of the rental agreement for Polkadot's parallel chains up for sale.
It’s a testament to the strength of @Polkadot that so many talented teams are in the running to be among the first five projects to launch on Dec 17. In this respect, we’re all winners. We’re looking forward to kicking off the multi-chain future with you! (2/3)
— Acala - DeFi Hub of Polkadot (@AcalaNetwork) November 18, 2021
Polkadot is an inter-chain smart contract network that enables the transfer of assets between its parachains. Earlier this month, its developers deployed the first parachain for auction. However, the technology is still undergoing heavy development. Nevertheless, at the time of publication, Polkadot projects have raised over 87.6 million DOT ($3.44 billion).
The second Polkadot parachain auction is ongoing, with the spot up for leasing for the next two years. Currently, the projected winner is Moonbeam, an Ethereum (ETH) compatible smart contract platform designed for building interoperable applications. It is in active development and expected to launch its mainnet by the end of the year.
Thus far, Moonbeam has raised 34.28 million DOT, or roughly $1.35 billion, in its auction from over 46,000 contributors. Investors will receive one Moonbeam (GLMR) token for each DOT they pledge, with 30% of rewards immediately available for claiming, and the remaining 70% shall vest throughout the 96-week lease. The reward pool consists of 100 million, or 10%, of its token supply of 1 billion. GLMR's token inflation stands at 5% per annum.
@MoonriverNW hits a new milestone! https://t.co/ojg2E4ycpx
— Moonbeam Network (@MoonbeamNetwork) November 17, 2021
Acala Wins Polkadot’s First Parachain Auction
Polkadot Holders Are Backing Acala and Moonbeam for Parachains
DeFi protocol Acala raises $400M in crowdloans during first Polkadot parachain auction
Both parachains on Polkadot and DeFi functions on Acala are still undergoing heavy development.
Decentralized finance protocol Acala announced Monday that they have raised 8.5 million DOT (worth $451.8 million USD at time of publication) from over 53,000 participants. The protocol is also set to win the first parachain auction on Polkadot.
Unlike typical crowdfunding rounds, Acala's financing mechanism is a crowdloan, which means it will eventually need to pay back the "crypto debt" it has solicited from investors.
On Nov. 5, Polkadot developers added the first parachain onto its network. Parachains are custom, project-specific blockchains that can be integrated into a main blockchain. The distinguishing feature of Polkadot is its Cross-Consensus Message Format. In essence, it would enable users to send and receive assets and execute smart contracts between parachains. Currently however, the technology is still under heavy development.
Polkadot's first parachain has been added
— Polkadot (@Polkadot) November 5, 2021
Referendum 41 has passed registering the Shell parachain on Polkadot, to ensure block production, inclusion, and finalization. The Shell parachain has extremely limited functionality: it does not even have the notion of accounts.
During the crowdloan, users deposit their DOT into a digital vault and receive two types of tokens post-launch. The first is the native Acala (ACA) token, which would be used for transaction fees, staking, incentivizing nodes, governance, and protocol maintenance. The utility token has a fixed supply of 1 billion, and will be minted in its entirety at its genesis block.
The second token investors will receive is the Liquid Crowdloan DOT (lcDOT). Each lcDOT represents an underlying DOT locked in the crowdloan. Among many features, users can use lcDOT as collateral to mint Acara USD (aUSD), the network's native stablecoin. Within two years, users will be able to redeem their locked DOT with lcDOT.
Earlier this year, Acala developers launched a testnet and underwent a security audit by Trail of Bits. In the audit report, Trail of Bits highlighted the lack of documentation and implemented features regarding the project. An economic audit of the project is still ongoing. As for Polkadot, the token's market capitalization reached an all-time high in anticipation of its parachain launch.
Polkadot unveils $770M development fund ahead of parachain auctions
Polkadot’s Gavin Wood has announced a more than $770 million development fund just weeks before the network’s parachain auctions are set to go live.
Polkadot (DOT) founder Gavin Wood has unveiled a $777 million development fund ahead of the network’s parachain lease auctions.
Wood tweeted on Oct. 17 that Polkadot’s treasury has allocated more than 18.9 million DOT (worth roughly $777 million at the time of writing) to a development fund that will be disbursed through community governance.
Wood gave broad suggestions as to how the funds might be spent, stating the capital will be mobilized to realize the community’s vision for “building, improving, educating” Polkadot’s ecosystem, in addition to “anything else that the Polkadot governance believes valuable.
According to Polkadot’s Wiki, the treasury funds can be spent if approved by the council, which votes on proposals put forward to them. The Polkadot council currently consists of 13 members, however the council plans to expand to 24 seats at some stage in the future.
With many Polkadot governance votes seeing poor community participation in the past, the development fund may be intended to bolster DOT holders’ engagement with the governance process According to Polkassembly, three governance proposals put forward this past week have seen total voter turnouts of zero, six and seven votes respectively.
Stakeholders wishing to put forward a proposal must reserve a deposit of at least 5% of the proposed spend, with the deposit being either slashed (a burn mechanism to deter validator misbehavior) if rejected, or returned if accepted. With funds being placed at risk in the event of an unsuccessful vote, Polkadot’s slashing mechanism may be a factor impeding governance engagement on the network.
The new development fund was also revealed just weeks before Polkadot’s highly anticipated parachain auctions are scheduled to begin in early November, suggesting the funds could be intended to kickstart development targetingPolkadot’s forthcoming parachain ecosystem.
Polkadot’s parachain auctions will be used to realize Polkadot’s vision for a sharded ecosystem. The auctions will see projects building on Polkadot compete to secure one of the 100 parachain slots by bidding to lock up DOT.
Parachains are Polkadot’s sharded side-chains that can host decentralized applications and protocols, offer specialized computation, and communicate with Polkadot’s proof-of-stake “Relay Chain” to finalize transactions.
Polkadot’s existing relay chain exclusively processes transfers, governance, staking services for the Polkadot network, with the forthcoming parchains being tasked with providing advanced features like smart contract functionality and cross-chain compatibility.
As such, the new development fund may be intended to encourage developers to begin building on Polkadot in preparation of parachains going live.
Related: Polkadot eyes breakout to $75 after DOT price rally sets up classic bullish reversal
Many onlookers have singled out the Coinbase-backed Acala Network as a frontrunner to win the first parchain slot on Polkadot. Karura Network, Acala’s deployment on Polkadot’s siser-network Kusama, won the first parachain auction on Kusama by a significant margin in June.
Karara pulled support from more than 15,000 entities to win its slot with a bid more than 500,000 KSM (worth roughly $184 million at the time of writing).