Helio Protocol has rolled out the $HAY destablecoin as a decentralized response to the standard crypto stablecoin. Here’s what you need to know about $HAY.
About the ‘Destablecoin’ from Helio Protocol
The terms “stablecoin” or “algorithmic stablecoin” can be confusing, as all stablecoins, including those backed by fiat, have the potential to fall in price and become volatile, albeit (usually) to a much lesser extent than speculative crypto assets. Enter the “destablecoin” from Helio Protocol.
Helio chooses to use the term “destablecoin” — with “de” standing for “decentralized” — to signal the potential risks of stablecoins and encourage users to invest more responsibly, and supporting a healthier and more sustainable user ecosystem through the product.
The core product of the Helio project is $HAY. The team believes the destablecoin will be a potential new asset class in the future, and $HAY is the first of its kind to be deployed in the market.
Difference Between a Helio Destablecoin and a Regular Stablecoin
There are four main types of stablecoins in the crypto market:
- Fiat-backed ($BUSD)
- Crypto-backed ($DAI)
- Algorithmic ($USDD)
- Commodity-backed ($PAXG).
As envisioned by Helio, a destablecoin will use a model backed by crypto assets like $DAI but will be fully decentralized.
While DAI leverages centralized crypto assets like $USDC, Helio’s destablecoin will use decentralized assets like $BNB as collateral. In addition, the destablecoin will leverage liquidity staking assets and aim to achieve stability without absolute fixation on fiat currencies.
Benefits, Risk Management
$HAY is a non-custodial and over-collateralized destablecoin that is backed by liquid-staked $BNB. To borrow or obtain $HAY, users will have to provide $BNB in the form of collateral by interacting with Helio’s protocols.
The BEP-20 compatible token HAY can be used for borrowing, liquidity mining and payment.
The Helio team has employed several systems to ensure safety and risk management. That includes an initial debt ceiling, meaning a maximum minting cap for $HAY connected to the market cap of the $BNB collateral.
A 66% loan-to-value ratio allows for a ~34% buffer in the price of $HAY in respect to a change in price of $BNB. Helio also has a Liquidation Alert System in place so borrowers can be notified should their positions be at risk of liquidation.
Finally, an emergency shutdown mechanism is the last line of defense against potential attacks or exploits on its infrastructure.
First Big Campaign for $HAY
On Sept. 7, Helio provided multiple options for users to access $HAY through the single staking program on Helio Protocol, creating a potential launchpad for the platform’s startup journey on the BNB Chain ecosystem.
In July, BSC News conducted an AMA with Helio Protocol about $HAY. For more details, visit here.
To learn more about Helio Protocol, visit the following links:
Twitter | Discord | Telegram | Website | Whitepaper