New HRMP Channels Have Opened Between the Leading Parachains on Polkadot, Allowing Native Movement of the GLMR, ACA, and aUSD Tokens Between Chains
Boston, MA – May 12, 2022 – Moonbeam, the top destination for multi-chain applications on Polkadot, has announced a cross-chain connection with the Acala network using bidirectional HRMP channels, allowing native communications and token transfers between the two chains without the need for bridges. This is the first connection using XCM on Polkadot since XCM was released last week, though many more are sure to follow in the same way that XCM based connections have spread on Kusama. With this update, ACA and GLMR, the chains’ base utility tokens, and aUSD, Acala’s decentralized stablecoin, will be freely moved and used in the DeFi ecosystems of both parachains. GLMR will be available on Acala following Moonbeam’s runtime upgrade later this month.
XCM (cross-consensus messaging) is a novel mechanism that enables interoperability within the Polkadot and Kusama ecosystems. This technology allows for rich messaging and interaction between parachains on the network. In this initial launch phase, the majority of these interactions center around token movement; in the near future, XCM and other cross-chain technologies will power a variety of messages that will enable multi-chain DApp deployments that leverage specialization on each chain like identity management, storage, and privacy.
GLMR can be used in Acala’s DeFi Apps in the coming days and will be considered as a future supported collateral type for minting aUSD stablecoins. Similarly, ACA and aUSD token holders can deposit those assets for use on Moonbeam through the DApp dashboard and, from there, they can be used across the many applications in its DeFi ecosystem as xcACA and xcaUSD. These ‘xc’ assets are XC-20s, a token standard based on ERC-20 but with enhanced cross-chain capabilities.
Acala is an decentralized finance network powering the aUSD stablecoin ecosystem. The Acala blockchain offers access to DOT-based assets and derivatives, a Polkadot-native decentralized stablecoin aUSD, Polkadot ecosystem assets, and cross-chain assets from Bitcoin, Ethereum, and beyond. The suite of financial applications offers options such as liquid DOT staking, multi-collateralized stablecoin-backed cross-chain assets (aUSD), and an AMM DEX for users to earn rewards while supporting Dotsama. ACA is the utility token that powers Acala through transaction fees, node incentives, governance, pallet deployment, and algorithmic risk adjustment. By integrating with parachains like Acala, Moonbeam sets the precedent for interoperability and continues to expand its access to a larger ecosystem of Substrate-native tokens and assets.
The introduction of XC-20s on Polkadot enables native assets from other parachains, like xcDOT, to be used on Moonbeam-based DApps as if they were ERC-20 tokens. As an XC-20, users can “deposit” tokens from elsewhere in the Polkadot ecosystem to be used with MetaMask to interact with Moonbeam-based applications. Token holders can use this format to move and use their tokens in the increasingly interconnected Polkadot ecosystem.
XC-20s conform to the ERC-20 technical fungible token standard, established as the technical standard for all smart contracts on Ethereum and Ethereum-compatible blockchains. Support for ERC-20 is one of the many ways Moonbeam makes it easier for developers to re-deploy existing projects to Kusama and generally makes token creation much simpler. XC-20s are ERC-20 compatible but also have cross-chain capabilities using the XCM functionality from Polkadot. Learn more about XCM on the Moonbeam documentation website.
About the Moonbeam Network
Moonbeam, the top destination for multi-chain applications on Polkadot, makes it easy to build natively interoperable applications. This Ethereum compatibility allows developers to deploy existing Solidity smart contracts and DApp frontends to Moonbeam with minimal changes. Like Moonriver, its sister parachain on Kusama, Moonbeam is expected to accumulate developer and user activity from the 80+ projects building DApps and protocols on the network. As a parachain on the Polkadot network, Moonbeam benefits from the shared security of the Polkadot Relay Chain and integrations with other chains that are connected to Polkadot. Learn more: https://moonbeam.network/.