Since its introduction in 2014, stablecoins have gradually received increasing adoption in the crypto space. This adoption gave birth to several stablecoins in different categories, such as the fiat-back stablecoins, Tether USDT, USD Coin (USDC), Binance USD (BUSD), and others. Also, there are algorithmic stablecoins like USDD, commodity-backed stablecoins like PAX Gold (PAXG), and crypto-backed stablecoins like DAI.
Stablecoins provide higher stability than more volatile crypto assets like Bitcoin, Ethereum, and others. But no token has perfectly exhibited stability in all senses. So, sometimes, the stablecoins always de-peg or fall below their supportive level, breaking the essence of stability.
Such issues led to the emergence of destablecoin, a new type of asset class in the crypto industry. HAY is the first destablecoin that powers the operations of Helio Protocol. The destablecoin is fully decentralized and strives to tackle the underlying risks associated with stablecoins.
What is Helio Protocol?
Helio Protocol is an open-source liquidity protocol that facilitates staking, borrowing, and earning yields on HAY, a destablecoin. Helio Protocol is deployed on the BNB Chain, supporting the new and innovative BNB-backed destablecoin.
The protocol is positioned to sustain the improved version of stablecoin projects as it optimizes the safety and capital efficiency, while protecting the element of decentralization, of the new asset class.
Helio Protocol; A Multi-Layer Platform
The Helio Protocol is a multilayer platform that can perform different functions; below are some of its functionalities.
- The protocol supports asset collateralization, instant conversions, destablecoin staking, borrowing, and yield farming.
- It ensures greater capital efficiency since HAY is a fully redeemable destablecoin.
- It is a Dual Token Model comprising a governance token (for decision-making) and a reward-bearing destablecoin (for generating yields).
- Helio Protocol facilitates external DEX integrations, which allow users to participate in different liquidity pools for more earnings.
Summarily, the core functionalities of the Helio Protocol include the following:
- Collateralization of BNB or BUSD.
- Withdrawal of collateral.
- Farming of HAY
- Borrowing of HAY.
- Participation in protocol governance using HELIO.
- Earning rewards in HELIO for borrowing HAY upon TGE.
Components of the Helio Protocol
Here are the three major components of the Helio Protocol.
- Collateralize – Users can use their BNB tokens as collateral to participate in the broader Helio ecosystem. They can stake in the Binance crypto exchange via the BNB Liquid Staking Services. Also, they could earn a reward on their collateralized BNB tokens.
- Borrow – Users with collateralized BNB positions can borrow through the Helio Protocol, payable in HAY destablecoins.
- Earn – The protocol accumulates the interest and staking rewards from collateralized BNB tokens within the Helio Revenue Pool. Then, the pool will distribute the HAY rewards to liquidity providers and stakers. Usually, the yield for users increases with their period of staking or holding HAY tokens.
HAY Destablecoin – A New Asset Class
HAY is a destablecoin, a new and innovative asset class introduced by the Helio Protocol. It is over-collateralized by BNB and stands as the first token of its class in blockchain history. It launched on the BNB Chain, the second-largest blockchain ecosystem in terms of TVL, which provides a wider adoption potential for the asset. Also, the high security and low gas fees on BNB Chain serve as an added advantage for HAY.
Users can get HAY by providing BNB as collateral to enable them to borrow HAY. Once they have HAY, they could stake the destablecoin for long-term yields. Also, they could move HAY to other external protocol pools integrated with Helio Protocol to earn more yields.
What are the differences between Stablecoin and Destablecoin?
Destablecoin differs from conventional stablecoins, which are quite popular in the crypto industry. Here are the two key differences.
- Destabecoins are fully decentralized. The prefix ‘de’ in the word stands for decentralization. This doesn’t signify a perfectly stable asset; it’s a decentralized token with some associated risks. For crypto-backed stablecoins their collateralization is based on centralized crypto assets. But HAY uses decentralized assets as collaterals.
- Destableoins achieve broader stability without having an absolute peg to fiat currencies, unlike stablecoins. Though the design is meant to keep it close to the price of USD, it is not directly pegged to the fiat currency.
Conclusion
Destablecoins are decentralized stablecoins that redefine and correct the use and functionalities of stablecoins in the DeFi ecosystem. They strive to maintain broader stability with no absolute peg to fiat currencies while protecting the sanctity of decentralization. This new asset class aims to disrupt the wider stablecoin industry with this new asset class, while offering suitable trades and transactions that reduce volatility, just as fiat currencies like USD.
Learn more about Helio Protocol at – https://helio.money/
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