Acala has launched a scheme on its network known as IADs.
IADs will create an Interprotocol credit issuance which enables direct deposits of aUSD (stable coin of Acala network and the Dotsama ecosystem) liquidity from one protocol to another, using the liquidity pool token as collateral for aUSD issued.
This scheme will now serve as the new form for issuance of aUSD in addition to collateral debt positions ( CDPs).
Protocols belonging to the Polkadot and Kusama ecosystems can now efficiently assess aUSD liquidity through this scheme.
What is the use for creating IADS
aUSD has expanded in use since its inception, with the launching of new Parachains in the Dotsama ecosystem and the launching of new DApps across the ecosystem. There is now (as expected) an increase in the number of use cases for aUSD within the ecosystem.
This increase in demand requires an increase in aUSD circulation to create the required liquidity demands for the continued sustenance of the ecosystem.
What are the benefits of IADS
IADS creates an efficient and effective distribution network for aUSD on Acala , Karura and other Parachains.
This connection enables aUSD to support remote trading venues on other Parachains through cross-chain consensus messaging (XCM) and also local trading venues.
With IADS there isn’t any interest rate/stability fee charged, but the aUSD protocol will however collect a trading fee from the swap as a liquidity provider which now goes into the aUSD Treasury.
Benefits to Users
- This will mean more liquidity, less slippage, and an all-around better trading experience across the ecosystem.
- A reduction of slippage in trades further improves cost efficiency for users.
- The liquidity of fiat-based Pairs involving USDC and USDT is also improved.
- It leads to an increase in the reach of aUSD which expands the stablecoin into new venues. This leads to more arbitrage opportunities on aUSD and further strengthening the peg with the US dollar.
For an in-depth overview of IADS, here is a 45-minute talk by Bette Chan a co-founder of Acala. The talk session involved a question-and-answer session with the community, as she gives a clearer picture of IADS.
About Acala
Acala is a decentralized finance network and credit system that is created to facilitate or provide liquidity to the Polkadot, Kusama multichain, and a wider web3 ecosystem.
The main product of Acala is the aUSD which is a multi-collateral, crypto-backed stablecoin that serves as the native stablecoin for the Dotsama eco-system.
Acala is also Ethereum compatible with in-built Defi protocols which developers leverage to build applications.
It also possesses a staking derivative (LDot), a decentralized exchange (Acala Swap), and EVM+ which is an improved version of EVM that offers a fully Ethereum compatible development environment that has full Substrate compatibility.