This is a text version of our AMA in a chat with the Helio Money project, a protocol through which users can borrow the decentralized stablecoin HAY for BNB. After that, HAY can be staked or moved to other protocols for additional profitability.
Here are the official resources of the project: Website | Twitter | Discord | Medium
AMA with the Helio Money project
Incrypted: Tell us about your project and its goals, how will it work?
Helio: The Helio protocol is built on the BNB blockchain and is an open source liquidity protocol for lending and generating income in the HAY token, which we define as a new asset class known as detablecoin.
The prefix “de-” means decentralized, and does not mean price volatility at all, as it happens with assets such as BTC.
In other words, HAY is an over-collateralized asset, where 1 HAY can always be exchanged for 1 crypto dollar, and it is backed by BNB tokens.
After launching our governance token HELIOour protocol will function as a DAO, where the community will decide and manage the protocol’s treasury, revenue pool, and future directions.
As for our goals, our roadmap consists of 3 stages
- Phase 1: expanding HAY’s market share by introducing a new asset class, de-stablecoins, and becoming the dominant provider in the BNB ecosystem.
During Phase 1, we will start and run our excess collateral model where liquid BNB tokens will be used as collateral to borrow HAY.
To increase the adoption rate of HAY, the team plans to partner with various DeFi protocols running on BSC, both decentralized exchanges (DEXs) and automated market makers (AMMs).
By the end of the first phase, we aim to increase the market value of HAY to $1B in TVL, which will also mean having ~$1.5B BNB as collateral held in the Helio protocol.
- Phase 2: Cross-chain expansion and management.
In the second phase, we will aim to become the leading and largest distablecoin provider in the BNB ecosystem.
After that, we will start exploring cross-chain opportunities to expand our ecosystem to EVM networks and non-EVM networks.
- Phase 3: Market entry + adaptation
By this time, we plan to become one of the key suppliers in the de-stablecoin market across all blockchains. We will also focus on mass implementation, which includes:
- listing on centralized exchanges as base pairs with other crypto assets;
- integration with major FinTech applications.
Incrypted: What can you tell us about the team behind the project and working on Helio?
Helio: The team was born thanks to our founder, Helius, after he realized that there was a shortage in the market for an entire asset class that we have since dubbed “destablecoin”. Seeing this shortcoming, he assembled a team of experts in both traditional finance and the crypto industry and set about building Helio. For now, our team members have chosen to remain anonymous, so I can’t share more details.
Incrypted: Tell us about partnerships and investors. What can you say about the rumors that you are partnering with Binance Labs and Ankr?
Helio :At the moment, we cannot say too much about our investors and partnerships, except that we use the ANKR liquid staking mechanism to power the Helio protocol. However, rest assured that partnerships with various well-known BNB-supporting DEXs and AMMs are definitely in the works, and once all the details are worked out, we will announce them on our social media (very soon).
Incrypted: Why BNB? Are there plans to add other networks?
The BNB ecosystem is the second largest network after Ethereum. The BNB ecosystem has yet to unleash a huge potential compared to Ethereum, which already has major players dominating the market. In addition, BNB operates on Proof-of-stake consensus, which is much more efficient and scalable compared to PoW networks.
As I said earlier, we have seen that there is a market gap in the BNB ecosystem when it comes to decentralized stablecoin, and we believe that our new product, HAY, has the potential to change the traditional industry.
As for the question of expanding to other networks, we are definitely planning this, but a little later, in the second stage of our roadmap.
Incrypted:How did the testnet phase end?
Helio: The testing phase was very successful as we were able to fine-tune some processes, such as changing the collateral ratio to a safer one to reduce liquidation risks. In addition, through the testnet, we have improved and added more security features to make our protocol reliable to use.
Incrypted: Will there be any rewards for those who take part in the testnet?
Helio: We have plans to reward our early adopters, but we haven’t finalized all the details yet. So at the moment I can’t confirm anything about it.
Incrypted: With the recent stablecoin events, the collapse of UST, the potential collapse of USDT, etc., are you afraid that people have become more cautious and conservative in their choice of stablecoins, which may not be beneficial for your project? There doesn’t seem to be a “100% safe asset” these days.
Helio: This is also one of the reasons why we decided to rebrand to detablecoins.
It is important to remember that de-stablecoins are no more prone to depegging than stablecoins. Each type of asset has its own potential strengths and weaknesses, and it is our responsibility to ensure that this is clearly reflected to our investors.
Incrypted: In light of the recent aUSD hack, how are you going to secure your protocol? And what will you do if you get hacked.
Helio: As I said, we have been working on the Helio protocol for a very long time, safety and reliability were the most important factors. We have implemented various security mechanisms to ensure that the funds we use are as safe as possible.
Here are some of the security measures we have implemented:
- A conservative LTV ratio of 66% is used to provide enough excess BNB collateral to survive a black swan event. 66% refers to MakerDAO, which is stable and maintains its binding.
- Personalized Elimination Alert System (LAS) from Helio Protocol. We have developed LAS which allows users to receive telegram notifications when the liquidation threshold is close. This gives users enough time to respond.
- The Helio protocol uses a failover mechanism that is regulated by a smart contract and will be triggered in the event of a black swan event. The shutdown process will be used as a last resort to protect the $1 value of HAY and also to prevent attacks on the Helio Protocol blockchain infrastructure. Thus, the shutdown mechanism will act as a last line of defense against any attack to protect user funds and assets stored on the Helio Protocol.
Incrypted: How is HAY different from the leader in the decentralized stablecoin segment DAI?
As for the second question, there is no doubt that MakerDAO’s DAI is the leading decentralized stablecoin on the market right now, and rightfully so, which is why we modeled our de-stable coin HAY to look like DAI. The best way to learn is to learn from other people’s successes and learn from their failures, right?
DAI has proven to be so resilient because it is decentralized and also backed by multiple assets. Similarly, HAY is also decentralized and backed by BNB. The key difference comes down to capital efficiency. The collateral provided for borrowing DAI is essentially stored in a vault and not used to its maximum potential. However, at HAY, we mitigate this capital inefficiency by liquidly staking our BNB on the network to earn additional rewards in the form of transaction fees.
Incrypted: Your litepaper says that Helio Protocol has built a very useful mechanism into their system called “Price Stability Mechanism”. Could you tell us more about how it works?
Helio: Of course! Well, for starters, the Helio protocol is able to keep the value of HAY at $1 against USD in the following scenarios:
- Scenario 1: When HAY > $1, the supply of HAY must increase.
Since HAY is expensive, there is an incentive for borrowers to borrow more HAY to sell for other assets for arbitrage opportunities.
In order to reduce the demand for HAY farming, Helio will reduce the HAY farming reward, reducing the interest in HAY farming.
- Scenario 2: When HAY
Because HAY is discounted, there is an incentive for borrowers to buy HAY in the market to repay their debt.
To reduce the demand for HAY, Helio will increase the interest in borrowing HAY, which will increase the farmer’s reward for HAY.
For a more detailed and technical description of our mechanism visit the website and read our whitepaper.
Incrypted: Is the BNB team involved in your project? If yes, how?
Helio: At the moment, unfortunately, I can’t comment on it.
Incrypted: Have you worked out the legal aspects that your company could theoretically face from regulators?
Helio: This is another reason why decentralization is so important. When it comes to regulation, centralized players are much more subject to regulation, and this has intensified with the recent USDC blacklists.
Decentralized stablecoins, or de-stablecoins as we call them, are far less subject to regulation. We see that this is the case at the moment. However, our legal team is constantly working to make sure we are safe and free from potential harmful regulations that could affect the Helio Protocol.
Incrypted: Please tell us about your bug bounty program. Is it up to date?
Helio: Of course! I will say it again, because it is important – in Helio Protocol, safety and reliability is a top priority. Our “bug bounty” program was built on immunefi and bug hunters can get monetary rewards for finding any bugs. You can find more information about the program here.
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