Acala Treasury
As mentioned in the previous article "Using [dSWF Decentralized "Sovereign Fund"] to Realize the Sustainable Development of Blockchain Network", Acala is committed to creating a brand new DAO 3.0 system, through the decentralized sovereign fund on the chain (decentralized Sovereign Wealth Fund, abbreviated as dSWF Fund) and network governance gain economic and decision-making independence. The assets in the dSWF fund can be understood as AUM (Asset Under Management) in essence, which is to realize the sustainable development asset management model. Even if others copy the project's open source code, liquidity, or even the entire community, the asset management scale will become a barrier that is difficult to copy. This means that Acala can continue to combine technology drive, brand advantage, and capital utilization into a joint force to promote the continuous appreciation of asset value and achieve long-term success.
Currently, the Acala Decentralized Sovereign Fund (dSWF Fund) is officially upgraded to Acala Treasury (translated as treasury, hereinafter replaced by "treasury") as a digital asset reserve on the chain. Both native and non-native assets will be used for Acala ecological construction. Openness and transparency are jointly governed by all ACA holders, and the fees for participating in community contributions and Acala agreements will all enter the treasury on the Acala chain, in order to achieve long-term sustainable development and rapid growth of the network.
The treasury on the Acala chain achieves two goals:
Ecological construction
Ecological construction
Why does Acala establish an on-chain treasury?
Different from Ethereum and others, Polkadot and Pioneer Network Kusama have different modes of operation. Polkadot and Kusama serve as relay chains, linking all projects in the ecosystem. Acala and Pioneer Network Karura serve as parallel chains to obtain connection permissions. It is necessary to pay regular (1-2 years) network "rent". Therefore, if the Acala and Karura networks want to achieve long-term sustainable development, they need to pay the network "rent" cost through the on-chain treasury. The way to obtain this cost is:
Additional issuance or inflation: Initiate additional Crowdloan (requires continuous financial support, such as additional issuance)
Self-government: Pay the cost of each slot auction in the future through treasury on the Acala chain (enabling the ability to have a fixed supply)
How does Acala treasury achieve network sustainability?
It will be achieved through the following process:
When Acala obtains the first Polkadot parachain through community voting, the Acala network will go online. When the lease period of the parachain is about to expire, there will be the following three ways to renew the lease, and the rent cost will be as follows: Way to override:
Self-government: on-chain treasury via Acala
Community: Rely solely on community votes
Hybrid: community voting and on-chain treasury participation
When Acala successfully renews the lease and obtains the parachain slot and expires again, the treasury on the Acala chain will directly allocate funds to pay the rent to realize the "permanent" use right of the parachain, achieving autonomy and sustainable development.
In addition to obtaining the "permanent" right to use the parachain, the national treasury on the Acala chain will be fully used for ecological construction, providing all-round and multi-level support from the following dimensions:
Continuously improve network stability and ensure network security
Improve protocol liquidity (such as providing liquidity for trading pairs in aUSD or DEX)
Development of related applications and peripheral tools
Community building, user education, marketing, etc.
Any future Acala-approved on-chain proposal (ATP)
Optimization and iteration of platforms and protocols
Where does the Acala treasury proceeds come from?
The source of income for the treasury on the Acala chain is network stability fees, debt warehouse liquidation fees, transaction fees, Staking pledge fees, etc., which will be settled in ACA and entered into the treasury on the Acala chain. The "Build Acala" Event will also be paid in DOT Units enter the treasury on the Acala chain.
The treasury on the Acala chain will be owned by ACA holders and participate in governance together. Any ACA holder can submit their own proposals on the chain. Each proposal will be voted by ACA holders. The Acala committee supervises any proposal on the chain ATP, review whether it will affect network security, etc., to avoid adverse effects caused by malicious proposals.
Acala On-Chain Proposal (ATP)
The overall process of the proposal on the Acala chain is shown in the figure. Any ACA holder can issue a proposal (ATP) as required, and after being approved by the Acala Council, all ACA holders can vote. After passing, the treasury on the Acala chain will direct grants.
ATP process
The specific proposal process is shown in the figure:
Initiate a proposal: Acala community users can initiate a proposal on the Acala governance interface, enter and give a detailed description of the proposal, such as "Proposal to use the DOT of the Acala treasury to complete the next parachain lease" and write the relevant reasons in the page description. You can share it on your social platform through a link, or mark it.
Voting process: After the review is passed, it will be submitted to the community for voting. When the proposal is in the "Proposed" state, it means that it is still in the voting process.
On-chain execution: When the proposal is passed, the state of the APT will change from "Proposed" to "Executed" and officially enter the execution stage. As shown in the figure, the proposal in the execution stage will be directly allocated by the Acala treasury, and the allocation and follow-up can be seen on the chain Proposal implementation status.
About Build Acala
The Build Acala series is an event prepared for the Acala Treasury. All Build assets (DOT) will enter the Acala Treasury. The assets are not only open and transparent, but also controlled by ACA holders. Every ACA holder can make any proposal to Acala Treasury, and all proposals will take effect after passing the governance vote.
As mentioned above, Acala Treasury has two goals, one is to achieve sustainable development of the network, and the other is to promote ecological growth.
Based on these two goals, the assets of Acala Treasury will first be used for Polkadot's parachain slot auction to ensure the launch of Acala. Secondly, after ensuring the success of the parachain auction, pass proposals related to ecological growth (such as reserve high-quality assets, start the Grant plan, etc.) to ultimately help Acala achieve sustainable development.
Acala co-founder Bette said in the "Karura Parachain Auction & Build Acala: Ready the Treasury" event: "Whether it is participating in the parachain slot auction or participating in the Build series of activities, the effect is essentially similar, and Acala is used to obtain waves. Card slots are the primary goal. The key to choosing an activity to participate in is the mentality to help Acala get slots. If you don’t want to lock up assets for a long time, you can choose Build. If you are optimistic about the future development of Polkadot, then You can choose to participate in the parachain slot auction, which is not good or bad, it’s just one more choice, because all assets will not be controlled by the project, but by the Acala Treasury, that is, all Token holders.”
