What Is Acala (ACA)? How It Works & Where To Buy It

Acala Network is a Polkadot ecosystem-built decentralized finance (DeFi) network. It is designed to support a variety of financial apps utilizing smart contract tech, cross-chain interoperability, and rigorous security standards.

ACA is currently the 193rd largest cryptocurrency by market cap.

 

How Acala (ACA) Works

Acala is compatible with Ethereum, and applications that are built on it may continue to be interoperable with Polkadot and other blockchain platforms like Ethereum. The Polkadot Relay Chain hosts several parachains, including the Acala Network and other blockchains built with Polkadot’s dedicated Substrate blockchain building platform.

Acala Network customers can access various financial services. This includes a stable token with the ticker symbol “aUSD” that is backed by a basket of cryptocurrencies on the Honzon blockchain.

In addition, Homa’s tokenized staking liquidity protocol paves the way for the development of permissionless staking derivatives as part of a phased, multi-part rollout strategy which will be launched as L-DOT. It can be considered a decentralized trading platform that uses algorithmic “market makers” (AMM).

All of them require gas fees, but the Acala network’s gas fees are considered to be micro gas fees in comparison. After Polkadot is finished, Acala will release the final, production-ready version of the protocol, at which time these features will be made accessible to the Acala community on the Acala Mandala test network.

To facilitate the development of dApps utilizing the programming language, Solidity (Ethereum’s smart contract programming language), and the issuance of assets that are functionally equivalent to Ethereum standard tokens, the Acala Network developed its own Ethereum-compatible virtual machine (VM). This is called the Acala Ethereum Virtual Machine.

Acala Network coins are technically compatible with ERC-20 tokens because of the Acala EVM, which was developed for this purpose. The Acala platform can mint ACA, aUSD, DOT, and renBTC, all of which run on separate blockchains, thanks to this functionality included in the interoperability design.

The Acala token, or ACA token, plays a crucial role in the Acala ecosystem by facilitating the network’s stringent security procedures. In addition, Acala allows programmers to take advantage of network security while creating a wide range of distributed applications.

The Acala network’s native token, ACA, gives consumers a simple way to communicate and engage with the ecosystem, whereas the Polkadot network’s decentralized financial network is well-known for its low gas prices. Furthermore, the platform’s interoperable cross-chain functionality has sparked a lot of attention in recent months.

The interoperability design enables the mintability of DOT and renBTC. Acala EVM conducts monetary transactions by converting them first into Substrate transactions that can be signed using Polkadot extensions, and then into a format that Ethereum can understand.

Users seeking more detailed information about the Acala protocol can read through the whitepaper.

 

What Is Acala (ACA) Used For?

The ACA token, which is the Acala Network’s native token, can be used and maintained in a variety of ways inside the Acala ecosystem. It is the governance token of the protocol and holders of the token receive unique voting rights. When using Honzon, ACA is utilized for any network fees and costs, network stability (in the form of aUSD loan interest), and liquidation penalties.

The user has the option of paying platform fees in Acala USD, the stablecoin; aUSD will then be converted to ACA using the protocol’s underlying exchange mechanism. When ACA is utilized to pay for fees, it is sequentially burned, removing it from circulation and contributing to the asset’s deflationary nature. When a platform goes through the liquidation process, ACA, along with the rest of the assets, is destroyed.

Acala also aspires to shift from its current governance structure to a model where ACA token holders play a bigger part in a progressive and multi-phase approach to decentralization. This transition from an on-chain governance structure to a governance model that is rooted in decentralization will occur.

ACA can be used to propose network amendments, respond to collateralized debt position price collapses, and change projected risk parameters (CDPs). If the Affordable Care Act fails, its assets will be immediately diluted and sold on the free market, allowing the network to be recapitalized.

There are also others who prefer to day trade or swing trade ACA tokens. Profitable opportunities from pricing adjustments are actively pursued. While the potential benefits are tremendous, so are the risks.

 

Where To Buy Acala (ACA)

Acala (ACA) has robust security protocols which have helped extend the functionality that the Acala network offers, and has given more credibility to the Acala foundation. The Acala network has become a popular protocol on the Polkadot network.

It’s possible to buy Acala (ACA) on the majority of major centralized cryptocurrency exchanges. To purchase ACA tokens on a centralized exchange, you must first transfer funds into the exchange’s wallet. The tokens for ACA will be added to your digital wallet on the exchange shortly after.

You can purchase, trade, and store tokens at the crypto exchanges listed below:

1. Binance
2. Coinbase
3. KuCoin
4. Gate.io
5. Crypto.com

Before acquiring any tokens on a centralized exchange, customers must have a comprehensive grasp of the associated dangers. When a user keeps tokens on an exchange, this basically signifies that they have lost possession of their private keys. This is because if the exchange is hacked, the user’s tokens might be lost.

The vast majority of tokens are kept in digital or physical wallets. A number of wallets designed to store tokens are available for purchase on the market. The most well-known and dependable digital wallet is MetaMask.

 

FAQs About Acala (ACA)

How long has Acala (Aca) existed?

The Acala Network was initially founded in 2019. The platform has become so popular because Acala lets developers leverage the security of the Polkadot network while engaging with a host of innovative decentralized applications.

It is often referred to as the decentralized finance network powering Polkadot because of its native products such as Acala Swap. It also managed to grow in popularity because of its extremely low transaction fees.

What’s controversial about Acala (ACA)?

Individual and institutional investors are interested in decentralized finance. However, because of its fast expansion and lack of oversight, the sector is vulnerable to exploitation. In recent years, these weaknesses have cost clients millions.

When evaluating projects, people should always consider the accuracy and logic of the information they find. Before investing in cryptocurrencies, collect as much information as possible.

Let’s take a look at the biggest controversy surrounding Acala (ACA):

• aUSD depegged – In August 2022, the native stablecoin of the Acala network suffered a 99% crash from its previous $1 price. The stablecoin has since recovered but many individuals are wary of the protocol and have since abandoned the Acala network citing fears of impermanent loss. Many users were also severely affected by the collateralized debt positions system that kicked in once the crash occurred – the platform’s utility token, ACA, also dropped significantly.

How many Acala (ACA) tokens are there?

At the time of writing, Acala (ACA) has a circulating supply of 487,394,605.00 ACA (49% of the total supply).

The total supply of Acala (ACA) is 1,000,000,000.

The max supply of Acala (ACA) is 1,000,000,000.

Can Acala (ACA) be mined?

Acala (ACA) can’t be mined. The Acala blockchain utilizes a proof-of-authority consensus model which makes ACA tokens unmineable.

Websites that claim to offer ACA mining should be avoided at all costs. A lack of caution while interacting with these websites might lead to irreversible monetary losses.

To maximize the value of one’s cryptocurrency holdings, several decentralized platforms provide users with opportunities to participate in lucrative incentive programs. Users may immediately begin taking part in staking, farming, and LPs by linking their digital wallets to the platform.

What is the market cap of Acala (ACA)?

The market cap of Acala (ACA) is the total amount of coins in circulation multiplied by the current ACA price.

Acala (ACA) Market Cap = 487,394,605.00 ACA x $0.21 = $104 million (193rd largest market cap).

The market cap is continuously fluctuating as the market changes.

 

Biggest Competitors Of Acala (ACA)

The market for decentralized currency exchanges is exploding and 2021 was the year with the greatest increase in interest in decentralized exchanges. Larger trade volumes were made possible by decentralized marketplaces such as Uniswap and Pancakeswap.

Specifically, DEXs attract users due to the distinctive DeFi products they offer, such as staking, farming, and liquidity pools.

The biggest competitors of Acala (ACA) are:

• Curve
• MakerDAO

What Are The Future Plans For Acala (ACA)?

Acala will make concerted efforts to bring in new customers for its services. More and more people are using decentralized exchanges, thus successful projects will need to implement novel features to keep up with the market.

Acala is a well-known protocol that also has low transaction costs. The protocol will also work to increase the number of value proponents in an effort to raise the profile of the initiative and speed up its widespread adoption.

 

Pros And Cons Of Acala (ACA)

Pros

• Minimal fees – The network has relatively cheap transaction fees compared to its competitors.

Cons

• Depegging – Acala’s aUSD stablecoin suffered a devastating crash and depegging. Many individuals are wary of the protocol after what happened.