Token Economics

What are ACAs & KARs

ACA is the native token of the Acala Network similar to BTC as the native token of the Bitcoin network, and ETH of the Ethereum network.
KAR is the native token of the Acala's canary network Karura. Both ACA and KAR tokens have 18 decimal places.

Usage of ACAs

  • ACA for Governance: ACA holders are entitled to participate in governance of the network include determining fees of the network, and protocols deployed on the network, electing council members, network upgrades etc.
  • ACA for Liveness: ACA will be used as stake to facilitate proof-of-liveness (parachain staking) mechanism.
  • ACA for Network Usage: transaction fees are payable in ACA
  • ACA for Capitalization: network profits accounted in ACA will be used as capital reserve backing the stablecoin protocol in case of liquidation, and are invested in the decentralized Sovereign Wealth Fund (dSWF) for long term sustainability of the Acala Network.

Mainnet ACAs

Fixed amount of ACA (100,000,000) will be minted on genesis and distributed according to our token economic plan.
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Testnet ACAs

Test ACAs are required to make transactions on the Acala Mandala Test Network. Testnet ACAs do not have any values beside allowing you to experiment with the network. Find out available testnet tokens and how to get them here.

Karura Tokens (KAR)

KAR tokens also have a fixed amount of supply, and a certain amount of ACA tokens are reserved to back the value of KAR. As a canary network of Acala, Karura serves as a proving ground, for network participants and developers to build on and try out Acala's governance, stablecoin monetary policies, staking derivatives etc. with real economic incentives.

Token Economics Overview

Acala via the path of progressive decentralization will eventually become a self-sustaining decentralized autonomous organization (DAO). Its self-sustainable nature reflects in both on-chain governance and economic design especially with its decentralized Sovereign Wealth Fund.

Treasuries and Funds

These treasuries and funds oversees and encodes various aspects of Acala's economic activities, investment and reinvestment strategies for long-term prosperity, and are collectively governed by token holders.

Decentralized Sovereign Wealth Fund (dSWF)

Acala's Decentralized Sovereign Wealth Fund (dSWF) is owned by the Acala Network and ultimately network token holders composed of cryptocurrency reserves, other strategic investments and financial instruments. dSWF is an on-chain protocol that manages and invest the network's surplus revenues for long term economic prosperity, network security, continuous development and other aspects pertaining to the network sovereignty.
Acala's dSWF will initially be deployed in holding foreign cryptocurrency reserves that specifically meet these criteria: the asset must have value, yield, and utility. The first two are economic concerns, while utility concerns of security access and other critical network access for Acala Network. A good example of such asset is the DOT token of the Polkadot Network. The DOT token is a top rated token value-wise, provides yield via staking returns, and having enough of which will guarantee access to Polkadot's shared security via a process called parachain auctions. We foresee as Web3 technology prevails, more suitable assets classes and investment instruments will be available for the dSWF.
Specifically Acala's dSWF will perform the following activities
  • manage network and protocol surpluses contributed to the fund
  • purchase foreign cryptocurrency reserve in a trustless manner e.g. via decentralized exchange
  • re-invest foreign cryptocurrency for yield in a trustless manner e.g. stake DOT through Homa protocol
  • participate in parachain bidding using DOT reserve when enough is accumulated

Acala Treasury

The Acala Treasury is the overarching department to manage ACA token distribution, network revenues, expenses and various grants when appropriate. It will contribute revenue surplus to the dSWF. The Acala Treasury is managed by the General Council and later together with the Referendum Chamber governed by the ACA token holders.
  • Revenues: e.g. transaction fess in ACA
  • Expenses: e.g. rewards in ACA to liveness providers, oracle service providers, initial parachain participant rewards

Honzon Treasury

The Honzon Treasury manages revenues and expenses from the Honzon stablecoin protocol and other associated protocols. Again any surplus will be contributed to the dSWF.
  • Revenues: e.g. stability fees in aUSD, liquidation penalty in aUSD, and DeX fees in respective tokens etc
  • Expenses: e.g. cover debt in aUSD

Homa Treasury

The Homa Treasury manages revenues and expenses (e.g. cover for slashing) from the Homa staking liquidity protocol. Surplus will be contributed to the dSWF
  • Revenues: e.g. staking profit share in DOT, early redemption fees in LDOT
  • Expenses: e.g. cover slashing in DOT
Last modified 1yr ago