Current US president Donald Trump introduced a universal 10% tariff on imports and higher specific rates for countries like China and Japan, signaling a major shift in US trade policy.

On Apr 2, 2025, Donald Trump announced aggressive US tariffs, including a universal 10% levy on all imports alongside specific rates of 34% on China, 24% on Japan and 20% on the European Union (EU), while the absence of tariffs on Russia was a notable exception. This policy shift resulted in significant volatility in both traditional and cryptocurrency markets.

The timing of Trump's announcement was widely speculated to be strategic, occurring shortly after US stock markets closed in order to mitigate immediate market reactions. However, the following day, Apr 3, 2025, saw substantial declines: the S&P 500 dropped over 5.1%, and the Nasdaq Composite fell more than 5.6%, reflecting investor anxieties about potential economic disruptions and heightened inflation. 

This marked the fifth-worst trading day of the 2020s, with parallels drawn to the infamous Black Thursday in March 2020. But in stark contrast, Bitcoin displayed remarkable resilience, trading around $81.7K, a mere 6% drop from its local bottom of $77K recorded on Mar 10, 2025. This stability suggests that investors may increasingly be viewing cryptocurrencies as a hedge against geopolitical uncertainties, since Bitcoin’s decentralized nature allows it to operate independently of tariffs and supply chain disruptions that affect traditional assets.

Trump characterized the tariff announcement as the beginning of a "Liberation Day," introducing a two-tier system where the universal 10% tariff would take effect on Apr 5, 2025, while reciprocal tariffs targeting around 60 countries would follow on April 9. This reciprocal approach aims to counterbalance existing tariffs imposed by other nations on American products, pushing countries and regions like China, Japan and the EU to reconsider their trade policies. During his speech, Trump presented a chart illustrating the disparities in tariff rates, using it to justify the administration's stance on the need for these measures to correct long-standing trade imbalances.

The implications for Asian countries are particularly severe, with many facing the highest tariffs, including Cambodia at 49%, Laos at 48% and Madagascar at 47%. Economists who favor proactive trade policies view these tariffs as a negotiation tactic, often referred to as a "game of chicken," whereby the US essentially dares other nations to either accept new, more favorable trade terms or face increased costs for their exports to the US. 

Trump argues that many countries impose heavy taxes on American goods that make them less competitive abroad. He believes that by introducing these tariffs, other nations will be compelled to lower their own export taxes on US products, fostering fairer trade conditions. However, critics warn that this strategy could backfire, potentially igniting a trade war damaging to every country and area involved. They express concerns that retaliatory tariffs from other countries might lead to increased costs for American consumers and economic uncertainty for businesses. 

The success of Trump's tariff policy ultimately hinges on whether other nations choose cooperation over confrontation. Proponents of the strategy argue that countries might fear losing access to the lucrative US market, prompting them to negotiate more favorable terms for American exports. If successful, this could theoretically boost US jobs and profits.

In summary, as the situation evolves, the effects of these tariffs on global trade dynamics and market stability remain to be seen, with potentially far-reaching implications for both traditional and cryptocurrency markets.

Amidst the tumultuous landscape created by the recent tariff announcements, Bitcoin has demonstrated a surprising level of resilience. Despite the significant volatility affecting traditional markets, Bitcoin maintained robust support around $80K, showcasing its ability to withstand external economic pressures. This stability is particularly noteworthy when compared to mainstream public equities, which experienced substantial declines in response to the tariffs.

The magnitude of Bitcoin's price drawdown was considerably less severe than that of many established stocks, highlighting its unique position in the financial ecosystem. While indices such as the S&P 500 and Nasdaq Composite plummeted over 5%, Bitcoin's relatively mild decline suggests that investors may increasingly view it as a safe haven and alternative asset during times of economic uncertainty.

This resilience can be attributed to several factors. First, Bitcoin's decentralized nature allows it to operate independently of traditional market dynamics and geopolitical influences, making it less susceptible to the same shocks that impact equities tied to physical goods and international trade. Additionally, the growing acceptance of cryptocurrencies as a legitimate asset class has bolstered investor confidence, leading to a more stable demand for Bitcoin, even in volatile environments. In particular, Strategy’s (formerly MicroStrategy) continued accumulation of Bitcoin and BlackRock’s launch of ETP products in Europe continues to cement Bitcoin’s unique position in equity portfolio allocation.

Furthermore, the current market sentiment indicates a shift in the way that investors perceive Bitcoin, particularly as an effective hedge against inflation and geopolitical risks. As traditional markets grapple with the ramifications of aggressive tariff policies, Bitcoin's ability to hold steady at the $80K level may attract more institutional interest, reinforcing its position as a viable alternative investment.

In conclusion, Bitcoin's resilience within the tariff-induced volatility not only highlights its potential as a digital asset, but also suggests a broader acceptance among investors seeking diversification and stability in uncertain economic times. This comparative strength against mainstream equities could signal a pivotal moment in the evolution of cryptocurrency as a mainstream financial instrument. 

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Bybit x Santiment: Tariffs-led whipsaw solidifies Bitcoin’s resilience

Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

As markets near US president Trump's "Liberation Day" for tariffs, crypto remains volatile. BTC has dropped from a local high of $88K to $82K amid signs that tariffs will affect many countries. Implied volatility has spiked and then eased. Other derivatives market metrics show that BTC and ETH volatility smile skews remain significantly skewed toward puts, a level last seen in March 2023.

Please check out the report’s highlights.

BTC options show signs last seen in March 2023

As crypto prices remain highly correlated with macro-sensitive assets, the week began with a surge in short-tenor implied volatility for BTC and ETH. The sell-off continued as President Trump announced tariffs affecting about 90 countries. BTC's front-end volatility quickly fell below longer maturities, and short-dated volatility smiles briefly favored OTM puts, reminiscent of levels seen during the March 2023 US banking crisis. 

SOL options remain the least traded among major cryptocurrencies (i.e., BTC and ETH), but there was a significant rise in call options this week, dominating both volume and open interest. Following the Mar 28, 2025 expirations, many contracts weren’t reopened, with the notional size of call contracts decreasing from over $3.2M to around $2.5M. However, there has been a slight increase in the notional size of open put options, as traders respond to a continued decline from the January all-time high of $250.

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Bybit X Block Scholes crypto derivatives analytics report (Apr 2, 2025): BTC option skews show a bearish sign last seen in 2023

Fidelity recently announced that it would be launching its own stablecoin, to be pegged to the US dollar. Learn more here.

After first making headlines upon filing paperwork for its very own money market fund, Fidelity seems to be taking the next step toward this grand goal by issuing its own 

 pegged to the US dollar could be the start of a multi-stage scheme to help crypto achieve mainstream adoption.

If you're new to fund-issued stablecoins, or perhaps a crypto beginner whose attention has been piqued, you might be wondering how Fidelity’s stablecoin could impact the crypto market. From highlighting how the Fidelity stablecoin differs from its other fiat-backed counterparts (e.g., 

) to elaborating on the possible motives for launching it, here's everything you need to know about the proposed Fidelity stablecoin.

Founded in 1946, Fidelity Investments has built a reputation as a leader in financial services. To date, it's managed trillions of dollars in assets for individuals and institutions alike. 

Known for its innovative approach to investing, Fidelity has consistently stayed ahead of the curve by embracing new technologies and trends. From mutual funds to retirement accounts, it's fair to say that Fidelity is a trusted name in finance, and has successfully established its presence, thanks to its storied legacy in financial services.

Fidelity’s foray into crypto isn’t new. With the demand for digital asset services growing larger over time, the company has quietly been building its presence in the crypto space through 

 since 2018, with dedicated service that provides custody and trading services for institutional and individual investors.

By launching its own stablecoin, Fidelity is taking this commitment toward 

 innovation to the next level, signaling its belief in the long-term growth potential of digital assets.

Like many of its popular stablecoin counterparts, Fidelity’s stablecoin is pegged to the US dollar. This ensures price stability, a critical feature for traders looking to mitigate risk amid 

. Built on blockchain technology, this stablecoin is ostensibly designed to integrate seamlessly with Fidelity’s broader ecosystem of tokenized financial products. This means users can expect a secure, efficient and transparent digital asset that aligns with Fidelity’s high standards.

 like Tether’s USDT and Circle’s USDC dominate the market, Fidelity’s offering brings something unique to the table: trust. As a regulated financial institution with decades of experience, Fidelity offers a level of credibility that few other stablecoin issuers can match. Furthermore, its focus on regulatory compliance positions it as a safer alternative for both retail and institutional investors.

Fidelity’s stablecoin represents a deliberate effort to integrate its institutional expertise with blockchain’s efficiencies. By creating a dollar-pegged digital asset, the firm aims to serve as a trusted intermediary for clients navigating both traditional and crypto markets. Moreover, the Fidelity Digital Assets division has already laid the groundwork through Bitcoin custody services and 

. The proposed stablecoin extends this infrastructure, allowing institutional investors to transition seamlessly between volatile cryptocurrencies and stable-value instruments without exiting Fidelity’s ecosystem.

The stablecoin market has grown exponentially, surpassing $200 billion in 2025. This surge is largely being driven by demand for volatility hedging and cross-border payment efficiency. Fidelity recognizes that traders and institutions increasingly require reliable on-ramps between fiat and crypto. Its stablecoin offers a compliant alternative to incumbents, such as Tether and Circle, who face lingering skepticism about reserve transparency. By entering this space, Fidelity would not only meet immediate demand, but position itself as a leader in institutional-grade digital assets, thus appealing to risk-averse entities.

The US regulatory landscape under the current administration has shifted decisively toward crypto-friendly policies, and the Stablecoin Innovation Act and the GENIUS Act are advancing through Congress, aiming to establish clear rules for reserve backing and 

 compliance. Designed with Treasury reserves and audit transparency, Fidelity’s stablecoin aligns with these impending standards. By proactively adopting regulatory best practices, Fidelity avoids the scrutiny faced by Tether — and positions its stablecoin as a “gold standard” for institutional adoption.

Stablecoins generate revenue through interest earned on reserve assets. For example, Tether reported over $6 billion in net income in 2024 from its treasury holdings. Fidelity already manages $80 billion in its Treasury Digital Fund, and can potentially monetize its stablecoin reserves while offering competitive yields to clients. This creates a dual revenue stream, consisting of fees from asset management and interest from stablecoin reserves.

The stablecoin market remains dominated by Tether and Circle, but their retail-focused models leave room for institutional alternatives. Fidelity’s brand reputation, combined with its existing relationships with hedge funds and pension plans, gives it a unique edge. For example, its stablecoin could integrate directly with retirement accounts, allowing 401k participants to allocate to crypto without custody risks. This differentiation is critical as rivals like BlackRock and Franklin Templeton expand their tokenized offerings.

While details are still scarce, the following are some likely use cases for the Fidelity stablecoin.

Using Fidelity’s stablecoin for staking

One of the most exciting use cases for Fidelity’s stablecoin is staking. For traders and investors, staking offers an opportunity to 

 by locking up their assets in support of blockchain networks. With Fidelity’s stablecoin, users could stake their holdings with confidence, knowing they’re backed by one of the most trusted names in finance.

Enhancing market liquidity and capital efficiency

Fidelity’s stablecoin is also expected to enhance liquidity across trading platforms. By providing a reliable medium of exchange that 

 fiat currency and digital assets, this stablecoin could streamline trading operations and reduce transaction costs, creating a win-win for traders and exchanges.

Facilitating real-world asset (RWA) tokenization

Fidelity's stablecoin is strategically positioned to drive the tokenization of RWAs by democratizing access through fractional ownership of commodities and real estate, thus streamlining the trading and settlement of tokenized securities as a stable exchange medium. This could ultimately foster a more efficient and transparent payment ecosystem for tokenized goods and services.

How will this impact the current crypto landscape?

Legitimization and mainstream adoption of crypto

Fidelity's established reputation within traditional finance lends significant credibility to the crypto space. This legitimacy can alleviate concerns among mainstream investors who have been hesitant, due to perceived risks or a lack of understanding. By offering a regulated stablecoin, Fidelity signals that digital assets are becoming a legitimate part of the broader financial landscape, encouraging greater participation from institutional and retail investors alike. This increased confidence can lead to wider adoption of crypto-related products and services, integrating them into everyday financial transactions.

Market stabilization and increased liquidity

The substantial capital that Fidelity brings to the market can significantly increase liquidity, reducing price volatility and making crypto assets more attractive to traditional investors. Increased liquidity facilitates smoother trading and reduces the risk of significant price swings, creating a more stable and predictable market environment.

Fidelity's involvement encourages dialogue between regulators and established financial institutions, leading to clearer and more comprehensive regulatory frameworks for stablecoins and other digital assets. By leveraging its existing compliance and risk management expertise, Fidelity can contribute to the development of robust security standards and best practices for the crypto industry. This increased regulatory clarity and security can reduce the risk of fraud and market manipulation, fostering greater trust and confidence among investors.

he introduction of a regulated stablecoin from a trusted institution can accelerate the integration of traditional financial products and services into the 

 (DeFi) space. Such integration can lead to the development of innovative financial instruments, such as tokenized securities and decentralized lending platforms, bridging the gap between TradFi and DeFi while allowing for far greater capital efficiency within the DeFi space.

Driving crypto infrastructure standardization

Fidelity's participation can drive the development of standardized infrastructure and interoperability protocols, facilitating seamless transactions across different blockchain networks and traditional financial systems. This standardization could improve the efficiency and scalability of the crypto market, thereby enabling greater adoption and integration with existing financial infrastructure.

What are the challenges that Fidelity may face?

While Fidelity's late entry into the stablecoin market is promising, due to its institutional credibility and regulatory focus, it does face substantial challenges. At the top of the list of Fidelity’s potential challenges: competing with established stablecoin giants like USDT and USDC will require Fidelity to demonstrate superior transparency, security and seamless integration of the Fidelity stablecoin within existing ecosystems. 

Building trust with a potentially hesitant crypto native demographic and overcoming established network effects will also require strategic partnerships, competitive incentives and a flawless track record in maintaining a stable peg to the US dollar.

The regulatory environment surrounding stablecoins is rapidly evolving. Recent developments such as the 

 (GENIUS) Act signal a more favorable stance toward crypto in the United States. For companies like Fidelity, this creates an opportunity to innovate within clear regulatory frameworks while addressing concerns around transparency and accountability. However, this evolving legislative landscape doesn't mean that Fidelity is out of the woods yet. This is especially so because regulations aren’t uniform across all jurisdictions. Therefore, Fidelity will need to demonstrate regulatory agility and adaptability to navigate these varying requirements.

Lastly, while there’s speculation that the Fidelity stablecoin could play a huge part in the company’s tokenized money market fund offering, there’s currently nothing set in stone. This is due to the inherent complexities of integrating a newly launched stablecoin into existing financial products, as well as the need to navigate potential regulatory hurdles related to that integration. Since Fidelity Digital Assets and 

 are two separate entities, there will likely be some coordination needed before Fidelity can incorporate its stablecoin into its onchain bond market.

Fidelity’s launch of its own stablecoin marks an important milestone in the evolution of digital finance. By combining stability with trust and regulatory compliance, this new offering has the potential to reshape the way traders interact with crypto. For beginners looking for a safe entry point into crypto, as well as experienced traders seeking reliable tools for staking and liquidity management, Fidelity’s stablecoin offers an enticing proposition. 

Likewise, for institutional traders, the proposed stablecoin provides a compliant and secure bridge between traditional finance and DeFi, unlocking new avenues for managing assets and diversifying portfolios. While challenges remain, Fidelity’s entry is poised to accelerate the integration of digital assets into mainstream finance, ultimately paving the way for wider adoption and innovation.

Intermediate

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Fidelity’s new stablecoin: A bold step into crypto stability

Learn how Amnis Finance (AMI) transforms APT staking with liquid staking solutions. Earn rewards, maintain liquidity, and explore DeFi opportunities seamlessly.

 (DeFi) enthusiasts passionate about exploring the endless opportunities in the crypto market.

, through which your assets are locked for a fixed period and can’t be used for other purposes, liquid staking solutions offer the flexibility to channel your staked assets to yield-generating ventures while preserving liquidity. 

One such platform is Amnis Finance, a pioneering liquid staking protocol on the 

 that provides investors with yield-bearing tokens to leverage DeFi opportunities.

 is a liquid staking platform on the Aptos blockchain whose users can stake their APT tokens and earn rewards through DeFi activities, such as 

Offering a staking APR of 8.02%, Amnis is exclusive to Aptos, a 

 with superior technology known as Move, designed for scalability, security and low-cost transactions.

Through Amnis, those who hold APT (the native token for the Aptos network) can stake their tokens and receive tokens of equivalent value, which they can now use for trading and investing opportunities without unstaking their locked tokens.

Furthermore, Amnis has created new financial instruments that are attractive to institutional investors. These instruments use a yield tokenization concept that splits tokens into yield-bearing and principal tokens.

At the heart of Amnis Finance’s operations is an innovative staking structure designed to provide the involved parties with efficient and flexible investing. Amnis system is powered by smart contracts that enable APT token holders to effortlessly maximize returns without having to lock their capital or run a validator’s node.

The basic architecture of Amnis is composed of the following components:

, it issues amAPT. The user can then use these tokens to participate in the Aptos DeFi ecosystem, or stake them on Amnis to receive stAPT tokens and generate rewards.

, maintaining a 1:1 peg with APT. Users who stake their APT tokens through Amnis Finance receive an equivalent amount of amAPT, which can be utilized across various DeFi platforms without forfeiting staking rewards. This design ensures that users retain flexibility and can engage in activities such as lending, borrowing and liquidity provision, while their assets continue to generate staking yields.

 that allows investors to instantly withdraw their amAPT tokens. This convenient withdrawal feature helps them bypass the 14-day waiting period common with traditional staking.

Amnis Finance has established a reserve mechanism to ensure price stabilization in case of market surges. When necessary, the platform may buy back amAPT, and the profits are transferred to the Amnis treasury.

For users seeking to maximize their staking returns, stAPT offers an auto-compounding yield-bearing option. By depositing amAPT into the stAPT vault, users receive stAPT tokens that represent their share in the staking pool.

As staking rewards accumulate, the value of stAPT increases proportionately, eliminating the need for manual restaking and providing a seamless way to enhance staking yields over time.

Beyond its dual-token model, Amnis Finance introduces an innovative approach to yield optimization through yield tokenization. This process involves 

 yield-bearing assets (such as stAPT) into standardized yield tokens (SY), which are then divided into principal tokens (PT) and yield tokens (YT).

The PT token represents the original value of the staked asset, and can be redeemed at a 1:1 ratio upon maturity, while YT signifies the portion of interest generated over time. This segmentation allows users to tailor their investment strategies by separately managing principal and yield components, offering greater control and flexibility in crafting financial outcomes.

 for the Amnis Finance ecosystem. It’s designed to ensure a balanced ecosystem on the network. AMI token holders can propose changes and vote on key matters regarding the operation of Amnis Finance. AMI is also used as an incentive to promote the adoption of the Amnis Finance liquid staking ecosystem.

Amnis Finance has a total supply of 1 billion AMI tokens, allocated as follows:

Furthermore, Amnis Finance has a token emission schedule (spread over 48 months) that’s designed to facilitate decentralization, ensure balanced distribution and incentivize participants. The vesting schedule is shown below:

 to reward its early adopters and active contributors to its ecosystem. The details of the AMI airdrop are as follows.

30 million AMI tokens were set aside for the Amnis Retroactive Airdrop, in which 10,000 users received rewards for their participation (based on their rankings). The snapshot for those who qualify for this airdrop ran from Nov 7, 2023, to Mar 25, 2025.

Eligibility was determined based on accumulated retroactive points earned through various activities, such as minting APT to amAPT on Amnis, providing amAPT/APT liquidity on platforms like Liquidswap and PancakeSwap, and depositing stAPT with Aries Markets.

In addition to the Retroactive Airdrop, Amnis Finance has allocated 5 million AMI for holders of Draconian NFTs, with each NFT granting its holder 1,500 AMI tokens.

Furthermore, to commemorate its token generation event (TGE) and honor community support, Amnis Finance launched an Exclusive TGE NFT Airdrop campaign. This initiative allows participants to earn rare NFTs and claim a share of a 1 million AMI reward pool. The claiming period for Exclusive TGE NFT holders began on Apr 2, 2025, and will remain open for 12 months.

 on Bybit’s Spot trading platform. To celebrate this listing, Bybit is holding two Token Splash events in which a total of 

Amnis Finance is revolutionizing the Aptos ecosystem by unlocking the full potential of the APT token through liquid staking. By converting APT into amAPT, users can earn staking rewards while they maintain liquidity and access to DeFi opportunities.

With added benefits like a Retroactive Airdrop and NFT-based rewards, Amnis incentivizes active participation and long-term engagement. As the platform continues to grow, it’s empowering users to put their APT to work more efficiently, increasing both flexibility and yield.

Whether you're a DeFi enthusiast or a long-term holder, Amnis Finance is a powerful tool for maximizing your Aptos staking potential.

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Amnis Finance (AMI): Maximizing APT potential with a liquid staking protocol

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DeFi

Fearful of the Acala DeFi hack and aUSD depegging? Here's how the team is planning to resuming operations after the aUSD crypto-backed stablecoin crashed 99%.

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 DeFi platform known as Acala was depegged by more than 99% because of a hacker. The team behind Acala was forced to place a pause on the hacker's wallet, which caused concerns for many Acala crypto investors about how decentralized the platform actually is. The Acala DeFi hack was among the most notable hacks in the crypto industry during 2022. If you're an Acala crypto user, you’ll want to understand what the Acala DeFi attack entailed, and what it means for the Acala network over the coming months.

Acala is a Polkadot DeFi platform that offers modular financial services, and comes with a liquidity hub that's designed specifically to support Polkadot DeFi. It brings borrowing, lending and stablecoin functionality to the broader Polkadot ecosystem.

. Since the Acala network was the very first DeFi protocol to be launched with Polkadot parachain auctions, it's considered to be the Polkadot DeFi hub. Being 

, developers can easily port over their projects from Ethereum to the Acala network. This means it can potentially become the DeFi hub for practically all cryptocurrencies.

 a governance token known as ACA and a native decentralized stablecoin known as aUSD. The ACA token is also used to pay for any transaction fees. Along with ACA, there are a wide range of additional tokens that are allowed for transaction fee payments on the Acala network.

Founded by the Acala Foundation, Acala is essentially an in-depth collaboration between two development groups with Polkadot DeFi, known as Polkawallet and Laminar. The foundation has strived to develop DeFi markets across different blockchains that were connected by the 

. In order to reach this goal, the Acala network was created as a community-owned and -operated financial layer that uses Polkadot's Substrate framework. While Acala includes financial application features, their main area of focus is improving development capabilities and interoperability initiatives.

Development on the Acala network first began in 2019 when the Web3 Foundation provided Acala with a development grant. Since that time, the Acala network has obtained additional funding from crypto investment firms Pantera Capital and Polychain Capital. These private fundings raised more than $8 million by August 2020, and the Acala network was formally launched on Polkadot in  late 2021.

 (DEX), a liquidity staking protocol and a stablecoin, which makes it a well-rounded crypto project that's part of the Polkadot DeFi initiative. Since the Acala network is fully compatible with EVM, it has a considerable amount of utility for Acala crypto investors.

When using this platform, you'll gain access to DApps, crypto assets and DOT-based derivatives. At the moment, the Acala network is made up of three parts: AcalaSwap, Honzon and Homa.

 is an automated market maker (AMM) that’s based on a standard swap interface, which gives you the ability to trade various crypto assets in liquidity pools. Any liquidity providers can earn fees for placing Acala crypto into the pools. While the Acala DEX uses a very familiar structure, there's no need for it to completely change things up when it comes to decentralized trading.

On the other hand, a new feature that's possible through the Acala network DEX is the ability to natively trade between different cryptocurrencies, across any blockchains that are connected to Polkadot. Note that both Polkadot and Polkadot’s canary network Kusama are already widely adopted. In fact, popular projects announce that they want to join Polkadot via parachains on a regular basis. Therefore, it's believed that the amount of cross-chain liquidity available through the Acala DEX will always hold up.

One notable difference between the Acala network DEX and all other Ethereum-based DEX platforms is that the Acala DEX is much more affordable to use. Polkadot is known as a high-throughput blockchain, which allows for micro–gas fees. These fees can be paid with Acala crypto and a wide range of additional cryptocurrencies.

 is the stablecoin protocol that's used with the Acala crypto network. Acala has taken advantage of its reputation as a cross-chain interoperability network by developing its own aUSD stablecoin, an 

 that’s been 1:1 pegged with USD. However, it's also backed completely by other crypto collateral.

The aUSD stablecoin platform works because of the Honzon protocol, which was created for minting stablecoins whenever these coins are deposited by crypto users as collateral. Upon the launching of this protocol, the aUSD stablecoin platform was able to accept ETH, BTC and DOT as collateral. It's believed that additional currencies will eventually be supported by parachains.

The aUSD stablecoin is easy to understand. Once collateral from Acala crypto (or a wide range of other currencies) is deposited, aUSD is officially minted, after which you can open a collateral debt position. Taking on this position means that you owe money directly to the protocol, which must be repaid along with a certain amount of interest at a later date.

Once you've repaid your collateral debt position, the protocol mentioned previously will burn the same amount of aUSD stablecoin, which reduces the amount of aUSD stablecoin that's currently circulating. This process allows the aUSD stablecoin to maintain its USD peg. If you're considering investing in the aUSD stablecoin, it’s important to know that Honzon comes with enhanced stability and security.

The Polkadot DeFi ecosystem centers on bonding assets. "Bonding" involves a process that's similar to staking. During the bonding process, your tokens are locked with a smart contract for a certain amount of utility. In return for bonding your Acala crypto tokens, you'll receive interest.

Before the development of decentralized finance, it was difficult to find platforms that used staked assets. When these assets did exist, they couldn't be used for liquidity. Now that staked derivative assets have been created, crypto platforms can access staked liquidity.

The Acala network takes this one step further by providing DOT holders with 

. Also referred to as Liquid DOT, LDOT is a type of token that’s used to represent your staked liquidity. Your LDOT can be removed from the Homa protocol before being used as aUSD stablecoin collateral through Honzon.

Acala provides developers, projects and investors that have DOT crowd loans with the ability to compound their entire crypto capital, without needing to place DOT tokens directly on the market. The protocol is designed this way to resolve the illiquidity issues that come with staked DOT tokens.

While Acala doesn't necessarily revolutionize DeFi, it does have some unique aspects that differentiate it from other DeFi hubs. First of all, the Acala crypto network focuses on collaboration through its cross-chain DeFi infrastructure, which makes it beneficial for the entire industry. Investors can take out loans and fully collateralize them with crypto that comes from other blockchains. You can also use the AMM to swap cryptos without needing to wrap them beforehand, which simplifies the entire process.

If you've previously invested in the Polkadot platform, the Acala crypto network has essentially facilitated a Polkadot DeFi platform. The most modern and advanced DeFi features are supported with Acala. If you hold the Acala crypto token, you have the ability to obtain passive returns with it specifically. The returns you obtain are based on the number of tokens you stake. All of your staking rewards are paid with ACA.

Despite Acala’s ample security features, as well as those of the entire Polkadot DeFi platform, an Acala DeFi hack occurred on August 14, 2022, resulting in a large portion of aUSD stablecoin being minted. In turn, aUSD lost around 99% of its value, which is why the Acala DeFi hack is among the most severe crypto attacks to have occurred in years. The exploit experienced by the Acala network was so strong that it caused aUSD’s price to drop to practically zero. Before, it was effectively pegged 1:1 with the U.S. dollar.

The team at Acala quickly determined that the Acala DeFi hack resulted from a misconfiguration of the aUSD/

 liquidity pool, which had gone live just earlier that day. This issue resulted in a minting error with a sizable amount of aUSD. One hacker involved with the Acala DeFi hack was able to mint around $1.28 billion in aUSD, which was swapped for a much smaller amount of the ACA token.

Shortly after the Acala DeFi hack began, Acala placed the parachain into maintenance mode, which paused all swaps. Oracle price feeds and cross-chain transactions were also paused, which resulted in the hacker being effectively stranded with $1.28 billion in aUSD tokens that were no longer worth anything.

A few additional users mimicked the initial hack to mint anywhere from $25,000 to $80 million in aUSD. The total sum of stolen funds is less than $10 million when not taking the aUSD depeg into account. After the Acala DeFi hack, many crypto investors began to raise questions about the Acala network’s viability.

Since the breach of the Acala network in mid-August, the team has managed to recover around 3 billion aUSD to help push the value closer to the 1:1 USD peg. During the second trace, following the Acala DeFi hack, they were able to recover around 1.68 billion aUSD. The first trace allowed for the recovery of 1.29 billion aUSD. Additional trace reports are expected to occur in the weeks to come, which may lessen the severity of the Acala DeFi hack.

While the Acala DeFi hack was severe, the team at Acala was able to quickly freeze all services, which effectively lessened the impact caused by the hack. Around 16 separate users who contributed to aUSD liquidity pools received aUSD that was minted during the Acala DeFi hack. Along with the trace reports, Acala will publish a postmortem. While aUSD was initially valued at around $0.01 after the Acala DeFi hack, it's now valued at around $0.85 because of recent recovery efforts.

As the Acala platform token, ACA has been allocated for rewards, strategic investors, the Acala team, further ecosystem development and a certain amount of reserves. By the end of 2026, more than $800 million of ACA will be distributed. The amount that's distributed to crowd loan participants, strategic partners and the Acala team will grow over time.

ACA is currently priced at $0.235 and has a circulating supply of more than 508 million tokens. The market cap is right around $120 million. Acala aims to soon release a final trace report that goes into more detail about the recent DeFi hack, which can be verified by the community with on-chain data. Proposals will then be formulated by re-collateralizing aUSD. The community will be able to make decisions and formulate service resumption plans.

The Acala DeFi hack was immediately damaging to the value of aUSD. While steps have been taken by the Acala team to remedy this issue, the extent and severity of the hack means that you should take some time to determine if Acala is a good investment for your portfolio.

While the hack has put a pause on the Acala team's road map, the map is still ambitious and may eventually be able to help crypto investors gain confidence in the platform. For instance, Acala eventually wants to enable balance transfers and is working to further invest in ecosystem development over the next few years.

Before investing, consider focusing on what the Acala team says about additional steps they'll take to resolve the issues caused by the Acala DeFi hack. If they correct these problems, you should be able to invest without worrying too much about your crypto portfolio.

If you’d like to invest in ACA, you can do so on Bybit with Spot trading. All that's required for you to get started is for you to 

From there, you'll notice a search box at the top center of the page. Once you type in "ACA," you'll be shown an 

 Spot trading option. Click on it to be taken to the main ACA page. On the right side of the page, you can enter the amount of ACA you'd like to purchase. Make sure that your wallet is connected to Bybit before you begin.

Despite the severity of the Acala DeFi hack, the team at Acala has taken numerous steps to recover the minted aUSD and stem the issues caused by this hack. However, some crypto investors still distrust Acala because of the belief that the platform isn't as decentralized as it had been advertised to be. Whether you choose to invest in the aUSD stablecoin, or decide to take your crypto assets elsewhere, it's clear that the Acala DeFi hack has caused a considerable amount of damage to the platform's reputation, as well as the value of aUSD.

Acala DeFi Hack: Is aUSD Worth Investing in After the Exploit?

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards