Terra's Anchor Protocol to Launch on Polkadot DeFi Hub Acala

A month after launching on Avalanche, Anchor continues its expansion onto new base layers.

AccessTimeIconApr 13, 2022 at 4:00 p.m. UTC
Updated May 11, 2023 at 4:37 p.m. UTC

Terra’s popular decentralized finance (DeFi) protocol Anchor is coming to Polkadot’s Acala network.

The partnership comes as Polkadot looks to grow its DeFi adoption and Anchor expands onto new blockchains.

According to a press release, Acala and Karura, a Polkadot parachain, will expand Anchor’s collateral options for the UST stablecoin with Liquid DOT (LDOT) and Liquid KSM (LKSM).

The teams also plan to set up liquidity pools for stablecoins UST and aUSD on Acala. AUSD, Acala’s most popular product, is the native decentralized stablecoin for the Polkadot ecosystem – one that recently got a $250 million war chest for attracting use cases.

Acala will also integrate with the cross-chain bridge Wormhole, allowing users to bridge their assets between the Polkadot and Terra ecosystems.

All told, backers of both Acala and Terra expect the tie-up to grow the decentralized stablecoin market – a segment of the crypto economy that has swelled to over $25 billion. The total stablecoin market (dominated by dollar-backed USDT and USDC) has surpassed $180 billion in market capitalization.

Beyond Terra

Anchor is a savings and borrowing protocol currently ranked third by total value locked (TVL), with users having committed over $14.7 billion in crypto assets, according to DeFiLlama. The protocol’s sky-high 19.5% yield has made it the most popular DeFi protocol on Terra.

More recently, Anchor has expanded into other base-layer blockchains after seeing massive growth on its native Terra. Last month, Anchor launched on the layer 1 blockchain Avalanche.

Polkadot also appears to be building out a host of stablecoin integrations, announcing earlier Wednesday that Tether’s USDT stablecoin would be launching on Kusama, Polkadot’s “canary network” for trialing projects.


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Tracy Wang

Tracy was the deputy managing editor at CoinDesk. She owns BTC, ETH, MINA, ENS and some NFTs.

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