Manta Network, the on-chain privacy solution for blockchain assets, has come together with Acala, an all-in-one DeFi network offering a blockchain platform, to institute cross-chain communication on testnet using XCM - a cross-chain message system designed for Polkadot.
The collaboration is reflective of Manta Network’s capability to privatize parachain assets and it also demonstrates the quality of composability within the Polkadot ecosystem. This is a live example of Polkadot’s interoperability initiative pushing the envelope. However, before delving deeper into the further implications of both these parties coming together, let us have a closer look at them.
A Deeper Look at the Players Involved
If seen as a product, the Manta network is the enabler of high-performance-driven private DeFi transactions. The types of transactions involved may include FT/NFT transfers or AMM-styled swaps. Led by a team, which includes a host of US crypto veterans, professors and scholars, associated with educational institutions such as Harvard and MIT and industry players like Algorand, Manta’s long-term evolution would result in a privacy-preserving blockchain.
Apart from the core team, Manta is also advised by multiple global tech leaders, including Hypersphere Ventures co-founder Jack Platts, Polychain partner Tekin Salimi, former Web3 Foundation co-founder Ashley Tyson and Consensys’ Shuyao Kong. The network received million-dollar funding from Poly Chain along with the backing of Three Arrows Capital, Multicoin, Alameda and Hypersphere.
Acala, on the other hand, appeared in the scene in October 2019. Apart from winning multiple Web3 foundation grants, it also won funding from Coinbase Ventures, Pantera Capital, Polychain Capital, Digital Currency Group, Arrington XRP Capital and more. With its distributed team working across countries like New Zealand, China, Europe, Brazil and the United States, the purpose of Acala is to help finance-oriented dApps in deploying smart contracts or built-in protocols that would have out-of-box cross-chain capabilities, security and financial optimizations.
The blockchain platform of Acala is secured by Polkadot. It also has the support of a suite of cross-chain financial applications, letting users trade, issue self-serviced loans and become liquidity providers while accessing trustless staking derivatives. It lets users earn high-interest APY on their holdings through its network that is scalable, Ethereum-compatible and DeFi optimized.
What Does Collaboration Mean?
The coming together materialized through a successful transmission of assets, where Acala assets from the Acala chain went to Manta’s chain. Next, the assets were privatized on the Manta Network, and the private assets were reclaimed to the original asset on the Acala network. The collaboration authenticated a couple of Polkadot’s key value propositions for blockchain projects: cross-chain communication and composability.
An ideal use case would be a user minting Liquid DOT (LDOT) on Acala and transferring it cross-chain to MantaSwap, Manta Network’s private AMM-based DEX, and providing liquidity to an LDOT pair on MantaSwap. Also, it could enable the private swapping of LDOT for any other token on the DEX.