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Helio Protocol reinvents the concept of stablecoins with its HAY destablecoin. Its architecture aims to eliminate all major risks associated with collateralization and centralized control over stablecoin issuance.
From centralized stablecoins to HAY Detablecoin by Helio Protocol: Highlights
Publicly launched in Q3 2022, the Helio protocol is developing HAY, the first-ever decentralized, over-collateralised, USD-pegged stablecoin backed by Binance Coin (BNB), the fourth-largest stablecoin by market cap.
- The Helio protocol went live on mainnet on August 19, 2022; its progress is curated by a powerful team of blockchain enthusiasts;
- The Helio Protocol team pioneered the concept of Destablecoin, i.e. a fully decentralized, over-collateralised, soft-pegged cryptocurrency asset;
- Its stablecoin HAY can be minted by collateralizing Binance Coin (BNB), a native cryptocurrency of the largest crypto ecosystem, Binance;
- In addition to rigorous internal stress tests, HAY has been subjected to four security audits by independent third-party teams;
- HAY’s economic model is balanced and protected from market volatility;
- Cryptocurrency users, regardless of their expertise, can benefit from HAY minting and staking in a decentralized and secure manner.
From TerraUSD (UST) and Fei (FEI) to HUSD and Neutrino USD (USDN), a number of stablecoins suffered painful crashes in 2022. HAY combines industry best practices and applies innovative approaches to address the weaknesses of its predecessors.
What are stablecoins?
Stable cryptocurrencies, or stablecoins, are digital (blockchain-based) assets whose prices are tied to an underlying fiat currency or commodity. Typically, stablecoins are pegged to the world’s major reserve currencies (US dollar, euro, Chinese yuan, offshore renminbi) or precious metals (gold and silver).
Launched in 2014 on the then-new blockchain BitShares (BTS), the USD-pegged stablecoin BitUSD was the first cryptocurrency of its kind. The aggregate capitalization of all major stablecoins peaked in May 2022: before the collapse of the Terra (LUNA) ecosystem, it remained at nearly $190 billion in value.
As of February 2023, this indicator stands at $136.2 billion. US Dollar Tether (USDT), USD Coin (USDC) and Binance USD (BUSD) are three dominant stablecoins; together they are responsible for over 95% of the segment.
Image from Blockchain Center
Stablecoins became mainstream because they can be used to transfer value, as a medium of exchange, and as a money storage tool. Unlike Bitcoin (BTC) and altcoins, they are not volatile but retain the same accessibility, liquidity and operability as other cryptocurrencies. Major analysts noted that stablecoins are being used by traders to “park” their money during times of a bearish recession.
Hence, the increase in the stablecoins cap is always interpreted as an indicator of an upcoming move higher.
Centralized Stablecoins vs. Decentralized Stablecoins: What’s the Difference?
In general, all stablecoins can be divided into two large groups, namely centralized and decentralized stablecoins. With centralized stablecoins, the process of minting (issuing) new assets is 100% controlled by the centralized entity behind the stablecoin. For example, Tether decides whether to increase or decrease supply of US Dollar Tether (USDT), Circle does the same for USD Coin, and so on. Also, the centralized issuer is the only entity that controls the basket of assets backing each stablecoin. To ensure that each stablecoin is backed by reserves, issuers typically create a portfolio of cash, commercial paper, government bonds, and so on.
Decentralized stablecoins work differently: the balance between reserves and circulating supply is controlled through the programmatic design of smart contracts. As such, this design automatically reduces the supply of the stablecoin when its price falls below the bracket and increases when it rises above the bracket. Decentralized stablecoins are therefore more flexible and censorship-resistant; however, centralized ones are easier to manage.
Introducing HAY, the groundbreaking detablecoin from Helio Protocol
Developed by Helio Protocol, HAY is a new type of decentralized stablecoin (destablecoin) that uses DeFi’s most reliable concepts: liquid staking, overcollateralization and so on.
Verified Overcollateralized Stablecoin on BNB Smart Chain: What is HAY?
Launched in August 2022 in the midst of a crypto winter, HAY by Helio Protocol seeks to remove all obstacles in the stablecoin segment. HAY is a decentralized stablecoin issued on the BNB Smart Chain (formerly Binance Smart Chain or BSC); This blockchain was chosen for its low fees, high operational speed, and EVM compatibility. HAY is powered by Binance Coins (BNB); To mint HAY and get anything, users need to deposit Binance Coins (BNB) as collateral.
Image from Helio Protocol
The platform operates with a secure loan-to-value ratio of 66%; To get 66 HAY, users should collateralize $100 equivalent of Binance Coin (BNB). Overall, HAY’s mint cap will never exceed 5% of Binance Coin (BNB) market cap. Such limits are imposed so that the Helio Protocol team can protect HAY clients from any negative waves of highly volatile cryptocurrency markets.
This design has undergone four security reviews by top-tier third-party teams, including SlowMist, CertiK, PeckShield, and Veridise.
Sustainable returns for liquidity providers
Besides creating all the opportunities that apply to most stablecoins, HAY by Helio Protocol can also be used for various “yield farming” activities in BSC-based DeFi protocols. First, staking operations on the Helio protocol are liquid; Instead of banning Binance Coins (BNB) and losing access to them, users can get AnkrBNB tokens and use them in a variety of ways.
Then, any Binance Coin (BNB) plugged into the mechanisms of the Helio protocol will be automatically converted into high-yield AnkrBNB tokens. AnkrBNB allows users to automatically share staking rewards.
Additionally, HAY stablecoin can be used in yield farming initiatives on a number of trusted decentralized exchanges (DEXes). For example, the HAY/BUSD liquidity pool is available on PancakeSwap (CAKE), the largest BNB chain crypto exchange.
Last but not least, the Helio protocol’s native cryptocurrency HELIO will be distributed to HAY owners once HELIO goes live in the coming months. As a result, HAY holders can earn a total of over 7% in APY for using this novel detablecoin.
HAY by Helio Protocol in Numbers: Assets, Users, Collateral
Thanks to its attractive high-performance design and balanced tokenomics, Helio Protocol’s HAY stablecoin gained remarkable traction in the first six months after its release. By the end of February 2023, the protocol had accepted over $60 million in collateral.
Image from Helio Protocol
Users minted and borrowed over $22 million worth of HAY equivalents at an overcollateralization ratio of 2.87. A total of 1752 borrowers locked their Binance Coins (BNB) on the Helio protocol, while over $101,000 in equivalent was injected into the stabilization pool.
Over $6.65 million in liquidity is tied up in the HAY/BUSD pool on PancakeSwap (CAKE).
Final Thoughts
HAY by Helio Protocol is a new generation overcollateralised stablecoin backed by Binance Coin (BNB). It can be minted by anyone who is collateralizing their BNB stake. Aside from being used in retail payments and DeFi initiatives, HAY is unlocking massive yield farming opportunities built on top of PancakeSwap and through internal staking reward mechanisms.
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