Helio Protocol
Helio Protocol is an open-source liquidity protocol for borrowing and earning yield on HAY —a new BNB backed over-collateralized destablecoin. The protocol aims to position HAY as the leading decentralized destablecoin protocol in the BNB Chain ecosystem, by leveraging Proof-of- Stake (PoS) rewards, liquid staking and yield-bearing assets. Helio Protocol will operate as a DAO, where the community will govern the protocol’s treasury, revenue pool and future direction.
What is destablecoin
Destablecoin is a new type of asset class within the crypto space that seeks to label a more accurate term in the current stablecoin landscape. The prefix “de-” stands for decentralized - it does not signify price volatility the way assets such as BTC experience. Destablecoins utilize decentralized, liquid staked, crypto assets only as collateral and do not aim to achieve absolute price stability with fiat-based currencies such as USD. While destablecoins are not fully volatile assets, it will allow for some price fluctuations as regular fiat-currencies would experience with varying reference rates and interest rate paraties as defined by the open market.
Core functionality
Helio allows users to:
- Collateralize BNB.
- Borrow HAY.
- Farm HAY.
- Repay the loan (HAY + Helio's borrowing interest).
- Withdraw collateral BNB.
- Claim reward in HELIO for borrowing HAY.
- Participate in protocol governance, using HELIO.
What’s the difference between destablecoin and stablecoin?
Destablecoins differ from the conventional 4 stablecoin types that currently exist in the market. Currently, there are four main types of stablecoins, Fiat-backed (BUSD), Crypto-backed (DAI), Algorithmic (USDD), Commodity-backed (PAXG). Like other crypto-backed stablecoins, destablecoins will utilize the overcollateralized model backed by crypto assets such as DAI. However, the key differences are:
Destablecoins are fully decentralized. Crypto-backed stablecoins such as DAI leverage on centralized crypto assets such as USDC, while destablecoins such as HAY will use decentralized assets such as BNB. as collateral. Additionally, destablecoins will also leverage on liquid staked assets.
Secondly, destablecoins aims to achieve stability broadly without an absolute peg to the fiat currencies. All currencies are different and have varying reference rates, so price fluctuations should be considered a norm defined by the market instead of aiming for a sense of absolute price stability at all cost. Similarly with destablecoins, it does not aim to achieve absolute price parity with US $1 as a primary objective nor rely on fiat assets as the backed collateral.