Collaboration between groundbreaking projects is undeniably the way that the crypto realm will push forward to forge deep utility and bring a state of mass adoption. This is no less true than the exciting cooperation between the Manta Network, who privatize assets and Acala, an all in one hub for decentralized finance that is compatible with Ethereum.
The partnership is genius. It means that assets can be transferred at lightning speed from the Acala chain onto the Manta chain. Once on the Manta chain, these assets can be privatized, and then simply sent back to be redeemed on the Acala Network.
The Future of Cross-Chain Interoperability
This type of cooperation represents a successful cross-chain communication and interoperability that enhances the usability of the asset. The operation was conducted on a testnet using XCM, a cross-chain message passing system, built for Polkadot.
The picture below shows how XCM can be used to privatize tokens on Manta and then redeemed as ACA/aUSD.
What is the Benefit?
The main benefit of this development is that users can take advantage of the Polkadot network with Acala, while using Manta Network to privatize any parachain crypto asset. This opens up a huge range of assets to the Polkadot network users, rather than them being limited solely to that chain's assets alone. Users can also leverage the AMM-based DEX on Manta. An example of how this could work is for instance minting LDOT on Acala and then transferring them across to ManataSwap. This enhances the liquidity of this asset, or indeed the LDOT can then be privately exchanged for any other token on this decentralized exchange.
Acala’s DeFi platform, which is secured by Polkadot, is like a gateway to its users to access a huge range of decentralized finance utilities which include the ability to trade, issue self-serviced loans, become liquidity providers, access trustless staking derivatives (liquid DOT — LDOT), and earn high-interest APY on their holdings.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.