Destablecoin HAY (HAY)
Destablecoin HAY ($HAY) is an overcollateralized decentralized stablecoin backed by liquid staked BNB and is redeemable for $1 USD value of cryptocurrency. It is managed by Helio Protocol — an open-source liquidity protocol, consisting of a dual token model and mechanisms that support instant conversions, asset over-collateralization, borrowing, yield farming, and staking [1][2][3]
Overview
Helio is a protocol that enables the generation of the $HAY stablecoin through BNB over-collateralization. [1][4]
"Helio’s mission is to become the most used decentralized stablecoin protocol leveraging Proof-of-Stake(PoS) rewards from liquid-staking assets" - the blog explained. [4]
On August 19, 2022, the Helio mainnet launched and HAY rebranded from a stablecoin into a decentralized stablecoin over-collateralized by BNB[5]. To obtain HAY, the user needs to provide BNB collateral and borrow HAY against it. After that, HAY can be staked for long-term yield and transferred to other protocols to generate additional yield. [7]
The Helio Protocol ensures HAY is redeemable when:
- HAY > $1, the supply of HAY will have to be increased. Since HAY is at a premium, borrowers are incentivized to borrow more HAY to sell for other assets for arbitrage opportunities. To reduce demand for HAY farming, Helio reduces HAY farming rewards by decreasing HAY borrowing interest. [3]
- HAY < $1, the supply of HAY will have to be reduced. Since HAY is at a discount, borrowers are incentivized to buy HAY from the market to pay back the debt. To decrease HAY borrowing demand, Helio increases HAY borrowing interest, which increases HAY farming rewards. [3]
In August 2023, Binance Labs committed 10 Million USD to Helio Protocol. [8]
"This investment will enable us to quicken our pace, making us even more of a contender in the LSDfi arena. Our focus will now turn to building our team, broadening the range of collateral among liquid staking providers, and strengthening our capabilities for multi-chain expansion in the future." - the press release stated[9]
Utility
Upon launch, HAY was issued as a BEP-20-compatible token. Its use cases include Borrowing HAY whereby users who have deposited BNB on the Helio Protocol (CeVault) are eligible to borrow HAY. The operations of borrowing HAY, repaying the loan, and withdrawing the original collateral are all governed by a set of smart contracts. [3]
HAY can also be used for Liquidity Mining: Via 3rd party LPs on DEXes, for Payment: As a means to transfer value, and purchase goods & services. [3]
HAY Debt Ceiling
The HAY Debt Ceiling refers to the maximum minting cap for HAY allowed on the Helio Protocol. It stipulates a maximum supply cap for HAY minting. Once this ceiling is reached, further borrowing of HAY is disallowed, regardless of additional collateral provision on the Helio Protocol. The Debt Ceiling will be dynamically adjusted in response to market conditions. [12]
Partnerships
Helio x PancakeSwap
In August 2022, Helio partnered with PancakeSwap, a DEX and leading protocol on the BNB network to create its first syrup pool farm on the PancakeSwap platform whereby CAKE stakers are able to earn HAY tokens. [6]
Helio x Biswap
On May 25, 2023, Helio Protocol announced a partnership with Biswap, a DEX platform with the official listing of HAY on Biswap. [11]
"This move will pave the way for efficient and cost-effective swaps, as HAY will now be part of the low-fee swap tokens on Biswap. The primary liquidity pair for HAY will be HAY-USDT." - the blog posted[11]
Helio x Synclub
In July 2023, Helio Protocol acquired Synclub, a Proof-of-Stake infrastructure provider and validator for blockchains, to unleash the full potential of HAY by incorporating additional LSTs (Liquid staking tokens) as collateral, thus empowering users by increasing capital efficiency for maximum rewards. The addition of Synclub’s staking infrastructure and expertise also further cultivates the product innovation required to secure a better staking experience for users. The upgrade brings a variety of product revamps, including new collateral conversion and withdrawal opportunities. [10]
