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2024 Ⓒ Wormhole. All Rights Reserved.

01 Feb 2023

4 min read

Wormhole Chains — Acala


We’re thrilled to announce the addition of Acala, the first official Polkadot parachain, to the Wormhole network. We are also supporting Karura, Acala’s sister network built on Kusama. Confused by the funky names? Fair enough. Read on to learn what they are and how they work!

1. First: What is Polkadot?

Polkadot is a protocol that enables blockchain networks to operate together seamlessly by providing shared security and trustless interoperability.

The platform operates two types of blockchains: a core network called a relay chain, as well as user-created networks called parachains. The parachains are connected to the relay chain, both of which are secured by the Polkadot network’s primary validators.

While parachains can be customized for any number of uses, they feed messages and data into the relay chain, which is responsible for maintaining the overall state of the chain. This structure ensures that each individual parachain shares the network’s security while focusing on its individual use case.

Besides sending tokens, Polkadot also allows blockchains to communicate and exchange actual data. You can learn more about the technical specifications in the Polkadot docs.

2. Ok — so what’s Acala?

Acala, Polkadot’s first official parachain, is a layer-1 blockchain that aims to form the basis of Polkadot’s DeFi ecosystem.

With Polkadot, Acala’s security-first infrastructure, this finance-customized blockchain offers a suite of financial products for users, developers, and institutions. Developers can deploy Solidity-based apps in Acala’s EVM+, or they can build natively on Acala using Polkadot’s SDK, Substrate. The blockchain infrastructure is trusted and utilized by integration partners such as Liquid Collective (Coinbase, Figment, Kraken, and more) and fintech companies like Current.com. Acala is the first-ever parachain to earn a slot on Polkadot, is backed by top industry firms like Polychain, Pantera, and Jump, and is the top engineering team in the Polkadot ecosystem by Substrate Github commits.

Acala is Ethereum‐compatible by way of the Acala EVM+. It enables Ethereum-based dApps to access scalability by launching on Acala while still benefitting from the full power, speed, and customizability of Polkadot’s SDK, Substrate (hence, EVM + Substrate). Any DApp team can now deploy their EVM-based smart contracts onto Acala with minimal changes while using the same tooling they utilize in other Ethereum environments (MetaMask, Truffle, Waffle, etc.). With the integration of Wormhole, any DApp built on Acala, or any other parachain connected to Acala, will be able to integrate Wormhole assets for their users.

Acala comes with its own built-in protocols, including:

  • Liquid DOT (LDOT): a trustless liquid‐staking protocol
  • Acala Dollar (aUSD): a multi‐collateralized stablecoin backed by cross‐chain assets
  • Acalaswap: a decentralized automated market maker asset exchange

The Acala Foundation is responsible for overseeing and supervising the advancement of Acala and Karura.

3. Got it… and what about Karura?

Karura is Acala’s sister network built on Kusama, serving as an experimental network where Acala launches its products first (including Wormhole).

Founded by the Acala Foundation, Karura is a scalable, EVM-compatible network optimized for DeFi. The platform offers a suite of financial applications, including:

  • Liquid KSM (LKSM): a trustless staking derivative (Liquid KSM)
  • Kusama Dollar (kUSD): a multi-collateralized stablecoin backed by cross-chain assets (kUSD)
  • Acalaswap (for Karura): an AMM DEX — all with micro gas fees that can be paid in any token

4. Kusama? Come again?

Kusama is Polkadot’s faster, wilder cousin — a multi-chain network for radical innovation.

Kusama and Polkadot are standalone networks built in nearly the exact same way, but Kusama has faster governance parameters and higher risk tolerance.

By launching on Kusama, Karura has the power to push the limits of what’s possible, giving the Acala Foundation team a place to launch bold new financial innovations. Karura will access Kusama’s plug-and-play security while enjoying high-capacity processing speeds, micro-gas fees, and interoperability between multiple networks, all ultimately bridged to Polkadot.

Karura will deliver decentralized financial products and stable assets to Kusama’s entire ecosystem of networks.

5. Anything else?

Native Token

ACA, the native token of Acala, serves several functions:

  • Network utility: ACA is used to pay network transaction, stability, and penalty fees if a user’s borrowing position is liquidated.
  • Network governance: Any ACA holder can propose network upgrades, risk parameter adjustments, or other network proposals to be considered by the elected General Council.
  • Node Incentivisation: Incentivizes network nodes to monitor and relay messages to Polkadot.
  • Algorithmic Risk Adjustment: Auto-adjusts risk parameters such as interest rates or collateral ratio.
  • Pallet Deployment: Allows teams to deploy new Substrate pallets on the Acala blockchain by staking ACA.

Learn more about ACA on the Acala website.

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Documentation & GitHub

EVM+ Docs

Contact & Socials

Stay up to date with Acala by following their social channels:
Website | Twitter | Telegram | Discord | Blog

6. Wormhole Noob? No problem!

If you’re new to Wormhole, here’s what you need to know:

⚬ The protocol’s total volume stands at over $35B, with hundreds of millions successfully transmitted messages.
⚬ Currently, millions of messages are submitted each day.

Check out Chase M., a Wormhole contributor, explaining more about Wormhole below:

7. Wormhole’s supported networks

Applications built with Wormhole allows users to send assets to and from any of the supported chains without double-wrapping the asset. It enables seamless access to each network’s vibrant DeFi and NFT ecosystems!

Check out the Portal bridge to see which chains you can bridge to!

8. Join the ever-growing Wormhole community

If you have questions, need support, or just want to connect, join the Wormhole community and keep up to date with our upcoming announcements. We’re always happy to hear feedback — join our Discord, and drop us a comment!

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