Acala, the Ethereum-compatible DeFi and liquidity hub of Polkadot, has launched Liquid Crowdloan DOT (lcDOT) forward of its upcoming crowdloan occasion, it stated in a post yesterday.
The product joins Acala’s suite of spinoff merchandise together with its lately launched KSM Liquid Staking product (LKSM), now out there on Karura, in addition to DOT Liquid Staking (LDOT), which is able to launch on Acala.
Why want DOT liquidity?
In preparation for the parachain slot auctions, parachain groups like Acala will obtain DOT contributions in a crowdloan — a mannequin which invitations supporters to strengthen every workforce’s bid to launch on Polkadot’s multi-chain community.
By straight contributing to a crowdloan, not solely can a participant help a parachain’s path to launch, however they will additionally qualify for varied rewards supplied by every workforce’s crowdloan occasion.
Nevertheless, supporters should additionally conform to a two-year lock on their DOT property, as any contributed DOT is locked in a contract on Polkadot’s Relay Chain and by no means touched by the parachain groups.
The Liquid Crowdloan DOT (lcDOT) is a spinoff that allows Crowdloan members to remain liquid whereas contributing to the Acala Crowdloan. With lcDOT, contributors can make the most of an unlocked token, representing their DOT contribution to the Acala Crowdloan, in Acala’s DeFi protocols.
How the Acala crowdloan works?
As an alternative of dropping entry to the underlying DOT liquidity for two years, lcDOT holders will have the ability to collateralize for a self-serviced mortgage in aUSD stablecoin or commerce trustlessly in Acala’s AMM-style DEX.
The Acala Crowdloan will now supply two on-chain choices for contributing DOT: straight contributing via the crowdloan module with a two-year lock, or contributing through Acala’s Liquid Crowdloan vault. With lcDOT, customers will observe a easy course of to take part within the crowdloan whereas sustaining entry to their liquidity:
- Contribute DOT to the Liquid Crowdloan Vault managed by Acala.
- Obtain Acala (ACA) tokens, your share of the community. The extra DOT you lock, the upper the rewards.
- Obtain Liquid Crowdloan DOT (lcDOT), a liquid token representing your locked DOT.
- Use in DeFi. lcDOT helps you to entry the underlying DOT liquidity. Swap, use as collateral to mint aUSD, and extra.
- Redeem the underlying DOT locked within the Acala Crowdloan along with your lcDOT tokens.
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