# Acala > The DeFi & Liquidity Hub of Polkadot Acala is a DeFi-focused Layer 1 blockchain that runs as a parachain on Polkadot. It lets users swap tokens, stake DOT without locking it up, and earn rewards on liquid staking tokens through apps built into the network. Acala is an application-specific Layer 1 blockchain for decentralized finance that runs as a parachain on Polkadot. It builds core financial tools into the network itself, including a decentralized exchange, DOT liquid staking, a multi-collateral stablecoin protocol, and a multichain asset router bridge. The project positions itself as a liquidity layer that developers and institutions can build financial apps on. Acala is secured by the Polkadot Relay Chain, with collators producing its blocks. Its EVM+ environment lets developers deploy EVM smart contracts that work with native Polkadot and cross-chain assets, and transaction fees can be paid in tokens other than ACA. The ACA token is used for fees, staking, incentive votes, and on-chain governance. Flagship apps include AcalaSwap for token swaps, Homa for liquid DOT staking, Euphrates for earning on liquid staking tokens, and Honzon for borrowing a stablecoin against collateral. Its sister network Karura runs the same stack on Kusama. Acala is used by DeFi traders, DOT stakers, and developers building on Polkadot. - Type: Project - Sector: Finance - Status: Active - Founded: 2019-10-01 - Profile: https://thegrid.id/profiles/acala ## Products - [Karura](https://thegrid.id/profiles/acala): Karura is the canary deployment of Acala on Kusama that mirrors the Acala DeFi hub architecture with a decentralized exchange, multi-collateral stablecoin protocol, and liquid KSM staking in a single parachain runtime. The platform serves as a proving ground for new features before their deployment on Polkadot. Karura supports Ethereum-compatible smart contracts through an integrated EVM layer. (Financial Services Platform, Live) - [Acala](https://thegrid.id/profiles/acala): Acala is a layer-1 blockchain that runs as a parachain on Polkadot, secured by the Polkadot Relay Chain and maintained by collators. Its runtime combines automated token swaps, multi-collateral stablecoin issuance, and liquid DOT staking in one network. Acala EVM+ lets EVM smart contracts interact with native Polkadot and cross-chain assets, and transaction fees can be paid in any token supported by the exchange. (Financial Services Platform, Live, Main Product) - [AcalaSwap](https://thegrid.id/profiles/acala): AcalaSwap is a decentralized exchange on the Acala parachain that enables trustless token swaps through AMM-based liquidity pools. The exchange is integrated into the Acala runtime, allowing transaction fees to be paid in any supported token and providing MEV protection through an in-protocol oracle. AcalaSwap liquidity also serves as a backstop for the Honzon stablecoin liquidation mechanism. (Decentralised Exchange, Live) - [Homa Protocol](https://thegrid.id/profiles/acala): Homa Protocol is a liquid staking protocol on Acala that allows users to stake DOT and receive LDOT, a transferable token representing staked DOT plus accrued rewards. LDOT can be used as collateral in the Honzon Protocol to borrow aSEED, allowing DOT stakers to access DeFi liquidity without unstaking. The protocol distributes DOT staking yield to LDOT holders automatically. (Liquid Staking, Live) - [Honzon Protocol](https://thegrid.id/profiles/acala): Honzon Protocol is a stablecoin issuance protocol on Acala that enables users to deposit crypto assets as collateral to open collateralized debt positions and borrow aSEED stablecoins. The protocol uses an automatic risk management algorithm, on-chain governance, and an auction mechanism to maintain collateral ratios and manage liquidations. Supported collateral includes DOT-based tokens and other cross-chain assets. (Stablecoin Issuer, Live) - [Euphrates](https://thegrid.id/profiles/acala): Euphrates is a yield aggregator on Acala that allows users to deposit liquid staking tokens into reward pools to earn base staking returns, ACA incentives, and loyalty bonuses. The platform supports DOT-based liquid staking tokens as well as cross-chain liquid staking tokens. A time-weighted loyalty bonus mechanism redistributes early withdrawal forfeitures to long-term participants. (Yield Aggregator, Live) ## Assets - [Acala Token (ACA)](https://thegrid.id/profiles/acala): ACA is the native utility and governance token of Acala Network, a DeFi hub on Polkadot. It is used for paying network transaction fees, stability fees on CDP positions, and voting on governance proposals including protocol upgrades and risk parameter changes. ACA has a fixed supply of 1.6 billion tokens with deflationary mechanisms through fee burns and unspent emission burns. (Utility) - [Acala Seed (aSEED)](https://thegrid.id/profiles/acala): aSEED is a decentralized stablecoin on Acala Network, formerly named aUSD and previously pegged to the US dollar. It is generated through the Honzon Protocol by depositing DOT or other crypto assets as collateral in a collateralized debt position. Following an August 2022 exploit that caused a severe depeg, the community rebranded the token from aUSD to aSEED in July 2023. (Stablecoin) - [Liquid DOT (LDOT)](https://thegrid.id/profiles/acala): LDOT is a liquid staking token on Acala representing staked DOT plus accrued staking rewards from the Homa Protocol. It is used as collateral in the Honzon Protocol to borrow aSEED and can be traded on AcalaSwap, allowing holders to access staking yield and DeFi liquidity simultaneously. LDOT accrues rewards automatically without requiring manual claims. (Liquid Staking Tokens (LSTs)) ## Links - [Main](https://acala.network) - [Documentation](https://wiki.acala.network) - [Whitepaper](https://github.com/AcalaNetwork/Acala-white-paper/blob/master/Acala_Whitepaper.pdf) - [Governance](https://apps.acala.network/governance) - [Terms of Service](https://acala.network/terms) - [Privacy policy](https://acala.network/privacy) - [Media Kit/branding](https://acala.network/branding) - [Twitter / X](https://x.com/AcalaNetwork) - [Discord](https://discord.gg/5JJgXKSznc) - [Telegram](https://t.me/AcalaAnnouncement) - [GitHub](https://github.com/AcalaNetwork) - [YouTube](https://youtube.com/@acalanetwork) - [LinkedIn](https://linkedin.com/company/acalanetwork) - [Facebook](https://facebook.com/acalanetwork) - [Twitter / X](https://x.com/KasuraNetwork) - [Medium](https://medium.com/acalanetwork) ## Legal This data is provided under two licensing models. Model 1 - open data. 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