AUSD
Crypto Overview
Purpose and Intended Use
AUSD is a decentralized stablecoin native to the Acala Network, designed to maintain a 1:1 peg with the US Dollar. It was created to serve as a stable medium of exchange within the Polkadot ecosystem.
Business Model Evaluation
AUSD is minted through overcollateralized loans using various cryptocurrencies as collateral. Users can mint AUSD by locking up collateral assets like DOT, LDOT, and ACA. The protocol automatically liquidates positions if collateral ratios fall below required thresholds.
Real-World Adoption
The token experienced significant issues in 2022 when it lost its dollar peg following an exploit of the protocol. While still technically active, adoption has been severely limited since this incident.
Platform Activity
Development activity on the Acala Network continues, though at a reduced pace since the 2022 incident. The team has implemented various measures to improve security and stability.
Mechanism Assessment
The core mechanism involves lending and borrowing with interest-bearing components, which raises concerns from an Islamic finance perspective. The collateralized loan system inherently involves riba-based transactions, as users effectively pay interest on their borrowed AUSD.
Crypto Impact
To assign a comfort level investing in AUSD from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to AUSD.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.