BNB

Decentralized Stablecoins: Introducing HAY and Why It's a Great Asset for the Crypto Landscape

by BSC News

March 27, 2023

chain

Recent industry events have once more highlighted why the industry needs decentralized stablecoins.

Stablecoins have emerged as a popular tool for traders and investors in the decentralized finance (DeFi) ecosystem. Often pegged to a stable asset, usually the US dollar, they are designed to maintain a stable value as they allow crypto investors to trade in and out of different coins quickly without the need to convert to fiat. Stablecoins have gained immense popularity as they offer a stable alternative to volatile cryptocurrencies like Bitcoin and Ethereum. However, recent events in the DeFi space have once more highlighted the need for decentralization in stablecoins. 

Earlier in February, Paxos ceased the issuance of new BUSD tokens as directed by the New York Department of Financial Services (NYDFS), causing an uproar as investors rushed to redeem their BUSD for other stablecoins. In addition, the recent Silicon Valley Bank collapse resulted in a temporary USDC depeg below $0.90. 

These incidents highlighted the risks associated with centralized stablecoins, as they are subject to the regulations and restrictions imposed by central authorities.

Decentralized stablecoins, on the other hand, are designed to be free from centralized control. They are built on blockchain networks and operate through a decentralized system, which allows for greater transparency and security.

Built on BNB Chain, Helio Protocol's HAY (BEP-20) solves the stablecoin trilemma of decentralization, capital efficiency, and safety. HAY is an overcollateralized “destablecoin” backed by liquid staked BNB and is redeemable for 1 USD value of cryptocurrency. 

Helio Protocol’s notion of “Destablecoin” represents a new asset class within the crypto space that seeks to appropriately label a new model in the current stablecoin landscape. The prefix “de” could often be misconstrued for price volatility as seen in regular cryptocurrencies. However, it stands for decentralized, clearly distinguishing products like HAY from legacy stablecoins such as USDC and BUSD which have centralized custodians. Destablecoins do not aim to achieve total price stability with the backing of fiat currencies, rather they utilize decentralized, liquid-staked crypto-assets as collateral. This helps mark the progression of the DeFi industry, as stablecoins progress from centralized to decentralized. 

HAY Use Cases

1. Borrowing of HAY

  • Users who have deposited BNB on the Helio Protocol (CeVault) are eligible to borrow HAY.
  • The operations of borrowing HAY, repaying the loan (with interest), and withdrawing the original collaterals are all governed by a set of smart contracts.

2. Liquidity Mining: Via 3rd party LPs on DEXes

3. Payment: As means to transfer value and purchase goods & services.

What is Helio Protocol?​

Helio Protocol is an open-source liquidity protocol for borrowing and earning yield on HAY - a new BNB-backed, over-collateralized destablecoin. Built on the BNB Chain, Helio Protocol consists of a dual-token model and mechanisms that support instant conversions, asset collateralization, borrowing, yield farming, and destablecoin staking. Helio Protocol aims to deliver an improved version of already successful stablecoin projects by further optimizing safety and capital efficiency. The protocol aims to achieve this by leveraging Proof-of-Stake (PoS) rewards, liquid staking, and yield-bearing assets. 

Helio smart contracts have notably undergone multiple external audits and security assessments from industry-leading security firms such as CertiK, SlowMist, PeckShield, and Veridise. 

HAY represents a significant step forward in the evolution of decentralized stablecoins. With its unique destablecoin model, overcollateralization, and liquid staking, HAY offers capital efficiency, safety, and decentralization in a single package. As the recent incidents involving centralized stablecoins demonstrate, decentralized stablecoins like HAY offer a more resilient and transparent alternative to traditional stablecoins. By prioritizing decentralization, transparency, and security, HAY is helping to create a more trustworthy and robust financial system in the crypto landscape.

Learn more about Helio Protocol and HAY via the following links:

Website | Twitter | Telegram | Medium

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