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Acala spins ‘Liquid Crowdloan DOT’ to allow Crdloan participants to access DOT liquidity


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AkalaDeFi and Polkadot’s Ethereum-compatible liquidity hub have launched Liquid Crowdloan DOT (lcDOT) ahead of its upcoming crowdfunding event, it said on Mail yesterday.

The product joins the line of Acala-derived products including the recently launched KSM Product Liquid Staking (LKSM), now available on Karura, as well as DOT Liquid Staking (LDOT), which will be launched in Acala.

Why do you need DOT liquidity?

In preparation for the parachute slot auctions, parachin teams like Acala will receive DOT contributions to a team game – a model that invites supporters to boost each team’s bid to launch on the multi-chain Polkadot network.

By directly contributing to the crowd rally game, the participant can not only support the parachain path to take off, but can also qualify for the many rewards that the crowd event has to offer each team.

However, backers must also agree to a two-year lock on their DOT assets, whereby any DOT contributing to a contract on Polkadot’s Relay Chain is secured and never affected by parachain teams.

The Liquid Crowdloan DOT (lcDOT) is a derivative that enables Crowdloan participants to retain liquids while contributing to the Acala Crowdloan. With lcDOT, contributors can use an unlocked token, which represents the DOT contribution to the Acala Crowdloan, in Acala’s DeFi protocols.

How does Acala Crewdloan work?

Instead of losing access to the underlying DOT liquidity for two years, lcDOT holders will be able to secure a self-service loan in US dollar stablecoin or trade with confidence in Acala’s AMM-style DEX.

Acala Crowdloan will now offer two on-chain options to contribute to the DOT: contribute directly through the Horde Unit with a two-year lock, or contribute via Acala’s Liquid Crowdloan vault. With lcDOT, users will follow a simple process to participate in the block raffle while maintaining access to their liquidity:

  1. Contribute to DOT in Liquid Crowdloan Vault operated by Acala.
  2. Receive Acala Tokens (ACA), your share of the network. The higher the DOT lock, the higher the rewards.
  3. Get Liquid Crowdloan DOT (lcDOT), a liquid token that represents locked DOT.
  4. Use in DeFi. lcDOT gives you access to the underlying liquidity of the DOT. Swap, use as collateral to mint US dollars, and more.
  5. Redeem basic DOT locked in Acala Crowdloan using your lcDOT tokens.

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