DeFi Ecosystem Acala Launches EMV for Polkadot-Ethereum Connection
Acala has stepped into the cross-chain functionality space with a new Polkadot-native EMV, as more blockchain projects seek to put a spin on cross-chain functionalities.
With the decentralized finance (DeFi) space seeing impressive growth, several blockchain developers have flocked into the industry, hoping to serve as viable Ethereum substitutes.
While Polkadot is one of the leading Ethereum competitors, a surprising new project is bringing the two rivals together.
Ethereum Developers Welcome
Polkadot stablecoin Acala has announced the launch of a native Ethereum Virtual Machine (EVM) that will bridge both the Ethereum and Polkadot blockchains.
The project explained that the Acala EVM had launched ahead of the ETHDenver 2021 hackathon in a tweet, bringing a surprising spin to the hopes of cross-chain interoperability.
According to the company's announcement, the new EVM will allow Acala to provide full-stack developers' tools using Substrate, Solidity, and Web3 to seamlessly integrate decentralized applications (dApps) and access the DeFi sector with a single wallet.
It will also provide protocol composability for EVM and Substrate runtime, allowing developers to deploy their applications on Acala without any tooling support.
All dApps developed will be able to use Polkadot-native and cross-chain assets like ACA, DOT, renBTCm, and more. They can also deploy ERC-20 tokens in the EVM and list them on decentralized exchanges to be used as gas fee tokens.
Acala's developers dismissed the notion they were trying to steal some of Ethereum's considerable market share in the DeFi space. Instead, they plan to empower project developers to access cross-chain functionalities. The statement read,
“We are firm believers in the power of Substrate and built the Acala EVM to optimize for Substrate's full potential and longevity rather than simply redeploying Ethereum on Polkadot.”
Compound Finance Brings Cross-Chain Functionality
Cross-chain functionality is becoming more of a growing trend in the DeFi market. This feature allows Compound to provide its assets and DeFi projects to move freely across multiple blockchain platforms.
In a world where Ethereum continues to experience scalability problems and rising gas fees, projects like Polkadot have presented viable alternatives. With cross-chain functionalities, the blockchain takes a significant step towards widespread adoption by providing one of DeFi protocol developers’ most glaring needs in cross-chain functionality.
Last December, Compound Finance, a top DeFi lending protocol, announced Compound Chain, a standalone blockchain that allows Compound to offer its services on multiple blockchain networks.
In a whitepaper, Compound noted that its new blockchain would support new developments in the general blockchain and crypto space. These include Ethereum 2.0 and possibly even Central Bank Digital Currencies (CBDCs). Thanks to its cross-chain integration, assets developed on the chain will be immediately available for lending on other platforms, allowing users to access more borrowing choices.
Speaking on support for other blockchains, Robert Leshner, Compound Finance's founder, explained to industry news sources that the project's community would vote on the blockchains to support. However, support for Ethereum will be a no-brainer. As long as a blockchain works with smart contracts, it is a viable candidate for Compound Chain support.