Acala is built using the Substrate modular blockchain framework. It is fully compatible with any Ethereum-based dApp thanks to its Acala EVM+, a customized version of the Ethereum virtual machine. The Acala approach to being EVM compatible includes emulating the Ethereum JavaScript SDK by implementing a web3 provider such as Bodhi.js instead of emulating the full Ethereum RPC node. The method called Acala EVM+ received an Open Grant from the Web3 Foundation and is still under development. A deeper dive into the concept is available on Acala’s Github page. Acala has its own AMM and DEX and lets users swap and stake assets. An important feature that simplifies customers’ experience and overall interoperability of the platform is that the users can pay fees for their transactions in any currency supported by the platform. Acala supports its own stable currency, aUSD, that can be backed by multiple assets added to the liquidity pools. The issuing of stablecoins is possible through Honzon Protocol. Users can borrow stablecoins against collateral using the CDP model, similar to how DAI stablecoins work. It means that various types of tokens can be used as collateral, including DOT, ACA, PolkaBTC, and KSM. Each aUSD equals 1 US dollar in value. Another Acala creation, Homa Protocol, allows derivatives trading in the project’s ecosystem. Holders of Polkadot’s native tokens can stake their DOT to receive its liquid version, LDOT. Liquid tokens can be deposited as collateral to mint aUSD, while their staked DOTs bring them variable yield upon redemption. Acala’s approach to governance includes employing various mechanisms that allow it to progressively decentralize and ultimately be controlled by the majority of the network’s stakeholders. Like Polkadot, the Acala governance framework comprises a Referenda chamber, a General Council, and a Technical Committee, which govern the network together. Referenda represents a simple stake-based voting scheme that can be started by public proposals or council proposals, it has an enactment delay period associated with it, however, emergency proposals can be fast-tracked to have a shorter enactment period. The so-called Referenda chamber works together with a General Council appointed by the Acala Foundation to represent its decisions regarding the network’s runtime upgrades. At the same time, any ACA token holder can propose any change to the network, its protocols, or the Acala Treasury, which gets collectively voted on in the Referenda chamber. Following that, the General Council “provides oversight with veto rights” to protect the best interest of the Acala network, by keeping it safe from proposals that may be found to be malicious or pose security risks. There is also a Financial Council meant to oversee updates of the stablecoin’s protocol parameters and other protocol fee parameters. It gets elected by the General Council via a 2/3 approval rating. Finally, a Homa Staking Council, elected by ACA holders, oversees updates of Liquid Staking parameters, such as validator selection. Acala has a so-called Oracle Collective, which elects Oracle operators and aims to solve the challenge of providing reliable, accurate, and decentralized oracles. The model is essentially a type of Proof-of-Authority that allows only trusted authorized operators to provide price feeds into the network. The model is to evolve into contemporary research and development on the so-called Oracle problem. Members of the Oracle collective are elected by the General Council via a 2/3 approval rating. The project also has a Technical Committee tasked with fast-tracking emergency proposals that are marked as critical to the network’s operation, as well as delaying enactments and canceling dangerous proposals. The Acala technical committee is also elected by the General Council via a 2/3 approval rating.