While stablecoins have seen a breakthrough in terms of their adoption ever since their issuance in 2014, their functional dependence on that of fiat has its own flipside. Stablecoins have a centralized control system and stay vulnerable to inflation; crypto-backed stablecoins tried to provide an alternative to this but have their own share of risks.
Helio Protocol presents an alternative to this with the introduction of “Destablecoins”, a new type of asset class that seeks to represent a new and innovative model in the present picture of stablecoins.
What is Helio Protocol?
Helio Protocol is a liquidity protocol that is open-sourced and useful for earning and borrowing yield on the HAY destablecoin. The platform will operate as a DAO with the community being at the forefront of governing the revenue pool, treasury, and future direction of the protocol.
The multi-layer platform has a dual token model and mechanisms that help users do instant conversions, borrowing, over-collateralization, staking, and yield farming.
What is Destablecoins?
Destablecoins are a new decentralized asset class that is over-collateralized with a liquid-staked asset BNB. Helio is striving to leverage Proof-of-Stake rewards, liquid staking, and yield-bearing assets and establishing HAY as one of the leading destablecoins in the BNB ecosystem.
The tokens, being decentralized in nature, look to achieve stability without any regulatory authorities or influences without a peg to fiat currencies. While all currencies are different and can have varying rates of reference, price fluctuations should be considered as a norm defined by the market instead of aiming for a sense of absolute price stability.
Liquid staking and collaterals
Helio Protocol’s BNB liquid staking mechanism is an enhanced version of staking on the BNB chain. With a Proof-of-Stake network that allows users to take advantage of the BNB Chain’s features, the mechanism eliminates the need to lock assets with a central node. This, in turn, removes the risk of having illiquid assets that can’t be spent or earned in other places.
HAY is generated and backed through collateral assets which are deposited in the Helio Protocol CeVault. Users who collateralize their BNB would be also investing in the broader Helio ecosystem and can borrow HAY to gain yield from staking.
Reduced borrowing interests
Helio Protocol has reduced its borrowing interests temporarily to 0% when using BNB as collateral, giving users a golden opportunity to borrow on the platform. As they use liquid staking derivatives in BNB, the real yield on BNB collaterals can be earned and distributed to HAY stakers and LP providers.
With a 0% borrowing rate for HAY, users are encouraged to borrow more which in turn will post more collateral on the platform thereby enabling higher liquid staking rewards.
The platform is also going to run an inaugural NFT collection campaign called #VerifiedGuardian to support these reduced borrowing interests with a collection that will be marketed to be unique with additional utility for holding the NFT.
Partnering with USDFi and FRAX
Helio Protocol became an official launch partner of USDFi, giving users a chance to trade, stake, and earn fees with $HAY pools on the decentralized exchange. It will be available on the USDFi Money Markets for borrowing and lending.
The platform is also having a strategic partnership with Frax Finance in order to strengthen the dominance and partnership of decentralized stablecoins. This collaboration also involves co-incentivizing FRAX and HAY liquidity pools on the Thena Fi and Wombat exchange as well as other co-marketing and partnership activities.
Final word
With a reduced borrowing interest, Helio Protocol is giving users a great chance to invest in their broader ecosystem. The #VerifiedGuardian campaign with its limited edition NFTs is also aimed at attracting more users into the space. With 215 users getting a chance to win 10,000 HAY.
The platform also uses yield-bearing tokens to give users the advantage of their interest-bearing positions by borrowing against them. The collateralized BNB that is staked is automatically converted into ankrBNB (yield-bearing tokens) which increase in value over time. This contributes to a user’s liquid staking rewards.
For more information on Helio Protocol, please check out their official website.
Disclaimer: This is a paid post and should not be treated as news/advice.
