Introduction
Helio Protocol is committed to become the premier LST-backed stablecoin provider, supplementing incumbents like USDT & USDC as their decentralized counterparts in the stablecoin arena. In this article, we shed light on the exciting developments for Helio Protocol & Synclub, including our forthcoming roadmap.
V1 Recap
Our previous articles provided an overview of V1, already in progress on Helio Protocol, which encompasses three landmark changes:
Merger with Synclub: As the second largest BNB validator on BNB Chain, Synclub’s merger with Helio Protocol will lead to extensive changes in our operational structure, including alignment in revenue flows, and integration of business development, marketing, operations, security, and risk management.
Diversification of BNB LST Collateral: This includes the integration of our basket of Liquid Staking tokens such as SnBNB (Synclub), BNBx (Stader), and stkBNB (Pstake), atop ankrBNB (Ankr), to broaden our LST offerings.
New Collateral Options: Going forward, users will have the option to provide collateral in ETH to borrow HAY. Like BNB-backed HAY loans,the same minimum Loan-to-Value (LTV) ratio of 66% and borrowing interest of 0% will be applied to users who deposit ETH and mint HAY. Similarly, we will liquid stake the ETH users have provided into ETH LSTs (wBETH). We also plan to introduce other collateral options including wBETH and SnBNB with an estimated completion date by the end of August.
Helio V2
With V1 almost complete, we are actively preparing on developing V2 of our roadmap, which includes a few key changes as follows:
Algorithmic Market Operator (AMO)
The Algorithmic Market Operator (AMO) module is a crucial component designed to enhance peg stability and capital efficiency of HAY. In short, an AMO module is a set of smart contracts that employs expansionary & contractionary monetary policies to maintain HAY’s peg with regard to different market conditions .
In other words, the AMO can perform open market operations (buying & selling of HAY) algorithmically, controlling the supply of HAY in a manner similar to the central bank. The AMO module can respond to HAY price fluctuations instantly to maintain price stability at $1, while earning profits for the project.
The key to understanding the AMO module is the fact that it does not require collateral to mint HAY to rebalance HAY liquidity pools, boosting the capital efficiency while securing peg stability. Here is an example of how the AMO module will work: if the price of HAY rises above $1.01, the AMO will mint more HAY and place it in a liquidity pool (e.g., Wombat Exchange) to lower its price to $1. If it falls below $0.99, the protocol will withdraw and burn previously minted HAY to raise the price back to $1. Supply of HAY is adjusted by the AMO according to the balance of assets in AMM liquidity pools which affect HAY price. When others do swaps in pools upon which AMO is deployed, they are in effect minting HAY by putting in other stablecoins in pools.
Ultimately, the implementation of the AMO module will greatly enhance the stability and efficiency of HAY’s peg to the dollar, as the AMO minted HAY can also participate in liquidity mining, thereby increasing the protocol’s revenue. The launch of the AMO module is estimated to be in late September or early October this year.
Lending Module
On top of the AMO module, we are also developing our own lending module. This will enable users to loan out the HAY minted by the AMO, and at the same time, also separate liquidation risks across different collateral asset pools. By allowing HAY holders to participate in the lending or supplying of HAY, we aim to create a fully autonomous and decentralized lending market on Helio Protocol.
Moreover, by partnering with several DEXes and lending platforms, our lending module expands the possibilities for leveraged borrowing for our users. In essence, after borrowing HAY, users can convert their HAY into different HAY-LP tokens. They can then use these HAY-LP tokens as collateral to borrow even more HAY, effectively leveraging their debt. This introduces another dimension of DeFi composability to HAY’s lending scene, enhancing HAY’s utility and capital efficiency.
Liquidation Module
Helio Protocol will be adopting the Dutch Auction Model for our liquidation module, which has been proven to be efficient and robust. When borrowers are approaching the liquidation threshold, the liquidation auction module will be initiated in order to maintain the loan’s LTV ratio and avoid the occurrence of any bad debt. The auction will start with a higher price initially which will decrease gradually until there is a bid for the collateral; in which the buyer will purchase the collateral, and hence, take over the “debt”. Additionally, Helio Protocol will allow the community to more easily access the participation of the liquidation process, via intuitive UI and community education, thereby driving process efficiency and community involvement. Essentially, the launch of this new liquidation mechanism will more easily provide bidders with the opportunity to gain profit by leveraging the price difference between the auction price and the market price of the collateral, while maintaining the over-collateralization ratio of Helio Protocol.
Integrations of RWAs
To further improve on the capital efficiency of HAY, we will be actively exploring the integration of RWAs (Real World Assets) to better optimize our reserves, and bring low-risk, stable and attractive rewards to our communities.
As the term suggests, RWAs refer to the various asset classes in traditional finance, such as bonds, real estate, alternatives, commodities, etc. The tokenization of RWAs will allow us to bring these off-chain assets onto the blockchain, opening a new realm of possibilities for higher capital efficiency and yield generation for HAY.
Going Multichain
Last but not least, in V2 of our roadmap, once both the AMO & lending module have been implemented, we are aiming to go multichain, expanding Helio Protocol across multiple different blockchains. We aim to expand to Ethereum first, followed by prevalent Layer2 networks such as Arbitrum and Zksync.
This is currently in progress and users can stay tuned to our updates on this soon!
Conclusion
In conclusion, Helio Protocol’s roadmap reveals a robust plan for growth and innovation. With the merger with Synclub, diversified LST portfolio integration, the introduction of our AMO & lending module, Helio is strengthening its position in the stablecoin and LSDfi market.
Our upcoming roadmap is an ambitious one, with plans to include new collateral options,a liquidation module upgrade, RWA integrations, and multichain expansion. The team is confident that our ambitious v2 roadmap signals our commitment to compete with larger decentralized stablecoins and liquid staking providers in the market.
The coming months are set to be transformative for Helio Protocol as it continues to evolve and potentially redefine the stablecoin landscape.
Keep up with our latest updates here!
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