Acala spins up ‘Liquid Crowdloan DOT’ to allow crowdloan participants to access DOT liquidity


Acala spins up ‘Liquid Crowdloan DOT’ to allow crowdloan participants to access DOT liquidity

Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more.

Start Earning Interest

The derivative product enables Polkadot crowdloan participants to stay liquid while contributing to the Acala Crowdloan.

· 2 min read

Acala, the Ethereum-compatible DeFi and liquidity hub of Polkadot, has launched Liquid Crowdloan DOT (lcDOT) ahead of its upcoming crowdloan event, it said in a post yesterday.

The product joins Acala’s suite of derivative products including its recently launched KSM Liquid Staking product (LKSM), now available on Karura, as well as DOT Liquid Staking (LDOT), which will launch on Acala.

How To Get Free Crypto  

Why need DOT liquidity?

In preparation for the parachain slot auctions, parachain teams like Acala will receive DOT contributions in a crowdloan — a model which invites supporters to strengthen each team’s bid to launch on Polkadot’s multi-chain network. 

By directly contributing to a crowdloan, not only can a participant support a parachain’s path to launch, but they can also qualify for various rewards offered by each team’s crowdloan event. 

However, supporters must also agree to a two-year lock on their DOT assets, as any contributed DOT is locked in a contract on Polkadot’s Relay Chain and never touched by the parachain teams.

The Liquid Crowdloan DOT (lcDOT) is a derivative that enables Crowdloan participants to stay liquid while contributing to the Acala Crowdloan. With lcDOT, contributors can utilize an unlocked token, representing their DOT contribution to the Acala Crowdloan, in Acala’s DeFi protocols. 

Coinbase Banner  

How the Acala crowdloan works?

Instead of losing access to the underlying DOT liquidity for 2 years, lcDOT holders will be able to collateralize for a self-serviced loan in aUSD stablecoin or trade trustlessly in Acala’s AMM-style DEX.

The Acala Crowdloan will now offer two on-chain options for contributing DOT: directly contributing through the crowdloan module with a two-year lock, or contributing via Acala’s Liquid Crowdloan vault. With lcDOT, users will follow a simple process to participate in the crowdloan while maintaining access to their liquidity:

  1. Contribute DOT to the Liquid Crowdloan Vault managed by Acala.
  2. Receive Acala (ACA) tokens, your share of the network. The more DOT you lock, the higher the rewards.
  3. Receive Liquid Crowdloan DOT (lcDOT), a liquid token representing your locked DOT.
  4. Use in DeFi. lcDOT lets you access the underlying DOT liquidity. Swap, use as collateral to mint aUSD, and more.
  5. Redeem the underlying DOT locked in the Acala Crowdloan with your lcDOT tokens.

Ad: Up to 20x margin on FTX.

Get an edge on the cryptoasset market

Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.

FreeBitcoin Banner  

On-chain analysis

Price snapshots

More context

Join now for $19/month Explore all benefits

Acala Network wins a parachain slot on Polkadot (DOT) testnet

Acala Network became the first-ever project to win a parachain slot auction on Rococo, the ‘testnet’ of high-speed blockchain network Polkadot.

2 min read →

Analyst explains why Polkadot’s DOT is up 50% in a week, outpacing Ethereum

While Polkadot’s native token DOT is down 10 percent in the past day, it is still up 50 percent in the past week after it has undergone an extreme rally, outpacing basically all other large-cap cryptocurrencies.

2 min read →

“Supply shock” predicted as Kusama (KSM) parachain auctions heat up

The Kusama ecosystem is filling out nicely as potential projects continue vying for auction slots.

2 min read →

Go to Source
Author: Shaurya Malwa

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.