First of its kind institutional liquid staking to bring a new multi-chain standard to enterprise-grade crypto services.
SINGAPORE , June 29, 2022 /PRNewswire/ — Acala Foundation, the organization driving Acala’s decentralized finance network on Polkadot, today announced they are collaborating with Alluvial to introduce the first enterprise-grade liquid staking solution for DOT, the native token of the Layer 0 blockchain. The collaboration will allow for more staking options for institutions while decentralizing staking products on major networks and enabling more flexibility and liquidity for institutional network participants.
The addition of Alluvial’s support for DOT makes it the first multi-chain liquid staking solution for institutions. Founded with a mission to expand the Web3 economy by supporting and securing Proof of Stake protocols, Alluvial is establishing a new liquid staking standard with early support from Coinbase Cloud and Figment. The liquid staking standard will be governed in a decentralized manner with a broad and dispersed community of industry participants.
According to Messari, DOT is the most held token by crypto funds after Bitcoin and Ethereum. With its DOT Liquid Staking product, Acala is focused on providing services that extract more liquidity from staked DOT, so institutions can better participate in the ecosystem. The collaboration creates a reliable, secure protocol tailored to enterprise and institutional users who have sat on the sidelines for liquid staking due to lack of regulatory-compliant tooling, but will now be able to participate in staking DOT via the Acala Network.
Acala is built with the Polkadot SDK (software development kit) called Substrate, allowing flexibility and customizability of the network to evolve along with changing regulatory or business requirements. Because of this, Acala is able to create a second instance of its liquid staking protocol to serve the needs of institutions in a compliant, permissioned environment offering KYC/AML checks and non-custodial asset management.
“There is so much untapped opportunity for institutions in the broader DeFi ecosystem, and specifically with liquid staking, due to lack of compliance-ready products. Polkadot can become a key entrypoint,” said Bette Chen, Co-Founder of Acala. “Our goal with Acala is to provide the ability for any person or entity to participate in the new open financial system, and this initiative with Alluvial is a natural fit to expand the reach of the Polkadot ecosystem.”
What is liquid staking?
Acala’s non-custodial DOT Liquid Staking product seeks to let token holders strategically utilize their DOT tokens in a user-friendly, secure, and efficient manner. Once a user stakes their DOT on Acala (thus helping to secure the Polkadot proof-of-stake network), they receive Liquid DOT, a receipt token which represents ownership of staked DOT and which can then be used to mint aUSD, lend, trade, stake, and participate in additional use cases. Liquid staking also provides increased token utility for locked staked tokens, and in Acala’s case, Liquid DOT is redeemable for DOT at any time. Liquid staking allows users to remain liquid and leverage additional DeFi activities using receipt tokens which would otherwise have no utility beyond locking for staking rewards.
Most proof of stake digital assets are subject to an unstaking period when users decide to unstake. This aspect of staking creates liquidity constraints since the asset is untradeable and cannot be used in other DeFi applications.
Liquid staking protocols allow token holders to receive rewards from the blockchain network in exchange for securing the network via staking and receive receipt tokens that facilitate transferability of staked tokens while the tokens continue to be staked and secure the network.
Liquid staking unlocks new opportunities for token holders and lays the foundation for a new ecosystem of financial products to be built.
“We’re incredibly excited that Acala is joining with Alluvial. The liquid staking standard is now multi-chain, a first for the ecosystem, and a big step forward towards achieving the mission of bridging the world’s wealth to secure a neutral and decentralized foundation for the next generation of the internet,” said Matt Leisinger, CEO of Alluvial. “Acala’s strong engineering team, flexible and customizable liquid staking protocol, and leadership in the Polkadot ecosystem made the collaboration decision an easy one.”
Interested in learning more about becoming a contributor to this standard?
For more information visit: alluvial.finance and acala.network
Learn more about DOT Liquid Staking on Polkadot here.
Acala is a decentralized finance network powering the aUSD ecosystem. The core product, Acala USD (aUSD), is a decentralized, multi-collateral, crypto-backed stablecoin serving as the native stablecoin of the Polkadot ecosystem. Acala’s Ethereum-compatible blockchain has built-in DeFi protocols for application developers to leverage, including a trustless staking derivative (liquid DOT), a decentralized exchange, and the EVM+, a hybrid EVM offering fully Ethereum-compatible development environment plus full compatibility with Substrate.
Alluvial is building the first-ever enterprise-grade liquid staking protocol across multiple blockchains marrying the technical & security requirements of institutions with the Web3 ethos of community driven-collaboration. The liquid staking standard, with early support from companies such as Coinbase Cloud and Figment, will be governed in a decentralized manner with a broad and dispersed community of industry participants. Figment and Kiln are developing the liquid staking standard for Ethereum.
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