Acala Foundation Joins Alluvial, Coinbase Cloud, and Figment to Provide a Compliant, Enterprise-Grade Polkadot (DOT) Liquid Staking Product to Institutions

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Acala

5 min readJun 29, 2022

The Acala Foundation, the organization building Acala’s decentralized finance network on Polkadot, is excited to announce a new collaboration with Alluvial, the team behind the Liquid Collective protocol. The collaboration will involve a compliant, enterprise-grade Polkadot (DOT) liquid staking product for enterprises as an addition to Alluvial’s staking solutions across multiple PoS blockchains.

Following the ever-increasing demand for decentralized liquid staking products, Acala Foundation and Alluvial’s collaboration introduces the first multi-chain standard for institutional liquid staking. The liquid staking standard on Ethereum and now Polkadot, with early support from companies such as Coinbase Cloud and Figment, will ultimately be governed in a decentralized manner with broad industry participation.

What is Polkadot (DOT) Liquid Staking?

During the staking period, a blockchain network will reward users with a percentage of staked tokens. Generally, when tokens are staked, users lose the liquidity associated with those tokens as they remain locked in the blockchain network. In the traditional staking model, when a user elects to unstake their tokens, a 28-day unbonding period (i.e., a token lock-up preventing transfer) adds to the inconvenience and illiquidity of the tokens.

Acala’s non-custodial DOT Liquid Staking product is aimed at helping token holders extract optimal value from their staked DOT tokens in a user-friendly, safe, and secure manner. After staking DOT on Acala, users receive liquid DOT, a receipt token that represents the user’s ownership of staked DOT. Liquid DOT can be used to mint aUSD, lend, trade, stake, and participate in additional use cases. Liquid staking also provides increased token utility for tokens that are locked and staked, and in Acala’s case, Liquid DOT is redeemable for DOT at any time. When unstaking, users have the option to wait 28 days for Polkadot’s unbonding period to receive the DOT back or redeem instantly without the wait. Overall, liquid staking allows users to remain liquid and transact using receipt tokens.

Learn more about DOT Liquid Staking on Polkadot here.

Alluvial: Institutional Liquid Staking

Alluvial is the first-ever enterprise-grade staking protocol operating across multiple blockchains. Most existing liquid staking protocols do not meet the security and compliance requirements of major institutions that want to access liquid staking or provide it to their end users.

Alluvial aims to align its operational stands to encourage client diversification, robust security practices, and multi-region infrastructure configurations. Its collaboration with the Acala Foundation creates a reliable, secure protocol tailored to enterprise users.

Alluvial + Acala Foundation: Institutional Polkadot Liquid Staking Services

Outside of BTC and ETH, Polkadot (DOT) is the most held token among crypto funds and institutions (source: Messari). While holding DOT has advantages, institutions have a strong growing demand for engaging in DOT liquid staking but have been unable to do so because there is a lack of compliant enterprise-grade liquid staking offerings.

Acala Foundation and Alluvial’s integration enables DOT liquid staking for a vastly broader audience of institutions looking to participate in securing the Polkadot network and growing its ecosystem. In addition, many institutions are distributors of these DeFi products which can then be offered to their retail users. Through this integration, we aim to gain adoption from the mainstream via these new distribution channels and create a new market for Acala products, such as the aUSD stablecoin, through network participation from new groups of users

How is Acala Foundation able to offer this compliant product?

The Acala team has spent the past 3.5 years building DeFi infrastructure for Web3, enabling us to deliver sophisticated blockchain solutions for real-world business opportunities. Thanks to the Acala founders’ decision to build with the Polkadot SDK, Substrate, the network can continue evolving and improving with Substrate’s flexibility and customizability. Acala’s protocols allow for forkless upgrades and evolve with the changing landscape of enterprise, regulatory, and developer requirements. In this case, the Acala team is configuring the Liquid Staking protocol to serve the needs of institutions, through Alluvial, in a compliant, permissioned environment. The environment will allow the protocol to address KYC/AML and various other compliance checks for institutions, all in a non-custodial solution.

“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 our mission of bridging the world’s wealth to secure a neutral and decentralized foundation for the next generation of the internet. Acala’s strong engineering team, flexible and customizable liquid staking protocol, and leadership in the Polkadot ecosystem made the collaboration decision an easy one.” — Matt Leisinger, CEO of Alluvial

Get Involved with Alluvial and Acala

Liquid staking provides additional use cases for staked DOT tokens, allowing users to stay liquid while the protocol continues to generate n DOT staking rewards. Institutions will soon access liquid staking through Acala and Alluvial’s technology offering.

Investors, validators, and builders interested in getting involved can learn more about becoming contributors to Alluvial and Acala via these links:

Institutions — enterprises@alluvial.finance
Validators/Integrators — integrators@alluvial.finance
Builders — web3builders@alluvial.finance
Alluvial website
Acala website

$250M aUSD Ecosystem Fund

If you are a developer interested in building a project that drives yield or utility of the aUSD stablecoin on Acala or any other parachain, apply for funding from the $250 aUSD Ecosystem Fund. The aUSD Ecosystem Fund is part of the broader Acala Ecosystem Program, offering liquidity for new projects, Acala Foundation Grants, engineering support, and other support to ensure the success of the aUSD ecosystem.

Build on Acala

If you’re a team looking to build on Acala or looking for support from Acala Grants, please get in touch with our team to chat about how we can support you.

About Alluvial

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.

About Acala

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.