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.
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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