Key points to remember
- Helio Protocol’s $HAY is a “destablecoin” that aims to be the leading stablecoin in the BNB chain ecosystem and beyond
- Helio Protocol has a strong focus on security, with smart contracts audited by top companies, a bug bounty program and an emergency shutdown mechanism
- With its decentralized collateralization model, HAY offers superior efficiency and capital security compared to centralized stablecoins
Helio protocol, backed by BNB Chain and described as a “destablecoin” instead of a stablecoin, has been implemented with a project that may change the paradigms of the USD-pegged coin industry. The goal of the Helio protocol is to make $HAY destablecoin the main stablecoin of the BNB chain and the whole industry. This open-source liquidity protocol enables the use of DeFi facilities such as lending and liquid staking with $HAY.
Helio Protocol’s vision is to provide users with access to a stablecoin service that is sustainable, resilient to market sentiment, and delivers real returns. By bringing better decentralization, better capital efficiency and better security to the stablecoin industry, Helio is poised to break the definition of the industry. The “de” in the name “destablecoin” comes from the “de” of “decentralized finance”.
Aiming to be the most adopted stablecoin in the entire BNB ecosystem, HAY has also made good use of the fact that BUSD, the most preferred stablecoin in this ecosystem, has been losing blood since November 2022. $HAY aims to expand to other important blockchains in the future and increase community adoption.
Security of the Helio protocol and $HAY Destablecoin
While the security of a DeFi project directly affects the success of that project, security is even more critical, especially in a project that offers stablecoins in its protocol. Platforms often have their protocols and smart contracts audited by an audit firm. Helio Protocol, on the other hand, has its smart contracts audited by leading companies such as CertiK, PeckShield, SlowMist and Veridise. The audit reports are available on the Helio site. Helio is also in talks with other reputable smart contract auditors.
Another method to ensure security is the bug bounty program. Those who manage to find a vulnerability in the open-source Helio protocol are generously rewarded. This allows the protocol to quickly avoid potential errors. Helio also incorporates an emergency shutdown mechanism as a last resort in the event of possible abuse. This means that user assets will continue to be protected in the event of a cyberattack.
Helio Protocol applies the best risk parameters to solve the main problem of DeFi, which is the inability to provide user security and decentralization simultaneously. The project, which aims to create both a sustainable destablecoin and a large community, maintains strict security controls from the start.
Why the BNB channel?
The existence of $HAY, first and foremost in the BNB ecosystem, is due to the lack of a reliable decentralized stablecoin. The development team carefully pursued development for the Helio protocol and $HAY after seeing some of the issues with stablecoins, which act as a critical bridge for crypto adoption.
What makes the Helio protocol unique?
Since $HAY is a product of the BNB ecosystem, the best competitors to compare it to are BUSD and VAI. It is obvious that BUSD is centralized, has legal issues and collateral errors. When it comes to VAI, Helio also has higher capital efficiency and safety, as Helio Protocol is a more collateralized, hence more liquid staking asset than VAI. Helio Protocol’s HAY destablecoin product is backed by decentralized assets such as BNB.
$HAY is also comparable to stablecoins on different blockchains. The largest decentralized stablecoin on the Ethereum blockchain is DAI. But DAI is also over-collateralized by USDC and similar centralized assets. This greatly reduces the level of decentralization offered by DAI. On the other hand, HAY is backed by decentralized assets, and HAY holders may have more opportunities to increase their capital efficiency through liquidity provision and staking methods.
How does HAY Destablecoin stay at $1?
The development team studied the various DeFi protocols in depth before releasing the Helio protocol and $HAY destablecoin. As a result of these analyses, an LTV rate of 66% was determined to ensure that HAY remains resistant. In other words, you can borrow 66 HAY for every 100 USD of BNB you deposited in the protocol. Thanks to this overcollateralization, Helio always has enough BNB to pay off debts.
The smart contract architecture of the decentralized stablecoin HAY is designed to allow arbitrage incentives to keep the token at $1. This means that arbitrageurs can trade HAY on various DEXs to keep prices stable on any price divergence. Therefore, users can consider this as an arbitrage opportunity if the price deviates between 1% and 2%, resulting in the price of $1 again.
At the same time, the market capitalization of HAY will never exceed 5% of the market capitalization of BNB. In other words, despite significant price drops in the market, there will still be enough BNB collateral in the protocol. Adopting a dual-token model, the $HELIO governance token is used for proposing and voting in DAO governance.
The essential
With its new perspective on the stablecoin industry, Helio Protocol aims to increase both capital efficiency and decentralization. Striving to become the most adopted stablecoin product in the BNB ecosystem, HAY has steadily increased its market value since its launch in mid-2022. With a market capitalization of $41.5 million by the end of February 2023, this token has excellent potential to continue increasing its adoption as it focuses on capital efficiency and absolute returns.
Adnan is a crypto enthusiast who always keeps an eye on the latest developments in the crypto ecosystem. He is an environmental engineer working on his MBA and has been following FinTech innovations for several years. Adnan produces written content to review crypto projects and support the crypto community.