Acala and Anchor Protocols To Collaborate and Unite Terra and Polkadot

Key Insights:

• Acala and Anchor together intend on amplifying Terra and Polkadot’s stablecoin space.
• The partnership will build deep liquidity pools for aUSD and UST on the Acala protocol.
• The announcement comes two days after Anchor charted a 20% drop.

Stablecoins are one of the most critical aspects of the DeFi space, and Acala, the cross-chain DeFi protocol, intends on creating a Decentralized Finance hub for the entire Polkadot ecosystem, furthering the reach of these stablecoins with this new partnership.

Acala and Anchor

The world’s biggest lending protocol, Anchor, joined hands with Acala to invigorate the stablecoin front of the Terra and Polkadot ecosystems.

Through this partnership, both Acala and Anchor will be setting up liquidity pools for TerraUSD (UST) and Acala’s stablecoin (aUSD) on Acala.

This will act as a gateway for the UST holders to enter the Polkadot ecosystem. The platforms plan on increasing the liquidity and increasing the yield opportunities for both these stablecoins.

Furthermore, the Karura parachain will be helping in furthering Anchor’s collateral options for UST with the Liquid DOT (LDOT) token as well as Acala’s – bearing liquid staking derivatives – Liquid KSM (LKSM).

Using these tokens, users can gain access to the Anchor yield, after which, depositing them as collateral, users can borrow UST on Anchor. In doing so, they will be able to earn the ANC incentives for borrowing and can also deposit their UST to earn a stable yield.

As per the press release, a whole new group of users from ‘Dotsama’ (Polkadot and Kusama) will be introduced to the Terra ecosystem.

Anchor on the Charts

While most of all, the altcoins haven’t been faring exceedingly well over the last couple of days, Anchor has had the worst week of them all. Anchor led the dip this week by losing 32% within three days. On April 11, the price fell by 19% within a single day.

Recovery from this fall will take some time since the Relative Strength Index (RSI) is still in the bearish-neutral zone and will need to breach into the bullish zone before a sustainable rally can take place.