At the beginning of this year, Ethereum LSD led the crypto industry out of the severe winter. In April, Ethereum Shanghai upgraded successfully, and Liquidity Staked Token gained market recognition. At the same time, some LSTFi products have also quietly begun to be deployed, and new opportunities have also come from this.
Why LSTFi has attracted attention
The fact that LSTFi has attracted attention is not accidental or a rotation of short-term market speculation, but the current state of the crypto market's response to traditional finance. The core reason is that under the pressure of capital inflows caused by the Fed's continuous interest rate hikes, cryptocurrency institutions are seeking to rediscover value.
We all know that the Federal Reserve has continued its interest rate hike policy for more than a year. After continuous interest rate hikes, the current bank deposit rate after the rate hike is between 5% and 5.25%. The rate hike has also caused a lot of funds to flow back to the United States, and at the same time, it has caused a lot of cryptocurrency funds to flee. People are gradually feeling that the yields of some stablecoins DeFi are not attractive. In general, the interest rate hike policy has a long-term impact, coupled with the effect of the crypto bear market, so the low yield of the DeFi market has actually made it difficult to attract funds to settle down, but LSTFi can solve this situation.
First of all, the yields of many liquidity pledges are close to the yields after the Fed’s interest rate hike. At the same time, these LST assets have further increased their yields through DeFi, thus forming competitive returns. This also ensures the crypto industry’s ability to attract funds so that it does not cool down.
In addition, the completion of Ethereum Shanghai upgrade has also attracted the market's attention to the development of LSTFi. Node staking is essentially the basis for the operation of Ethereum after the transition to POS. Similar to mining in the POW era, it can stably survive the bull-bear transition and exist for a long time. Therefore, LSTFi has naturally attracted close attention from long-term investors and has become an important driving force for DeFi to gain capital participation again.
Why Helio Protocol is worth paying attention to
At present, there are only a handful of public chains in the market that focus on developing LSTFi, except Ethereum, among which BNB Chain is the most promising one. The biggest advantage of BNB Chain is the update of new function codes and high community activity. For example, the launch of SBT soul-bound tokens, opBNB, and Greenfield launched this year have demonstrated that the BNB Chain community ecology can be comparable to the vitality of Ethereum, and even BNB Chain is better in the direction of chain games.
Therefore, when LSTFi began to attract market attention, people not only saw the prosperity on Ethereum, but also saw a lot of opportunities on BNB Chain. As a project deployed on BNB Chain, Helio Protocol also received a lot of attention. In addition, the recent merger of Helio and Synclub.io has once again added a lot of highlights to this project and expanded Helio's new development direction.
Helio's main functions currently include the issuance of stablecoin HAY, as well as lending and liquidity staking functions, which we will introduce one by one below.
By over-staking, HAY, an asset with a 1:1 ratio to the US dollar, is generated to provide a native decentralized stablecoin on the BNB Chain. The issuance process of HAY is similar to that of DAI. In addition to the issuance of HAY, Helio Protocol also provides HAY mining functions to increase the market demand for HAY, thereby ensuring the value and application scenarios of HAY.
The issuance of HAY is also an important development process of decentralized stablecoins on the BNB chain after BUSD was regulated by the SEC. It also represents that the risk resistance of DeFi on the BNB chain is also constantly increasing, and it is gradually getting rid of the unstable regulatory factors of centralized stablecoins.
Judging from the current data, the loan amount of HAY on the chain has reached 20 million US dollars, and it has great potential to become a popular decentralized stablecoin on BNB Chain.
Helio and Synclub merger expands LSTFi market
Another thing worth noting about Helio is its recent merger with Synclub. Synclub is a multi-chain LSD protocol, which we can regard as similar to Lido. It is the fourth largest validator on BNB Chain and manages more than $240 million in pledged assets. Synclub currently supports not only BNB Chain, but also public chains such as Cosmos, Polkadot, and Kusama. In the future, it will also support the LSD function of chains such as KAVA, bringing liquidity pledge functions to these chains, making it easier for everyone to participate in the pledge process of the above public chains. As a stablecoin lending and liquidity pledge project on BNB Chain, Helio itself has a high degree of fit with Synclub.
In short, we can regard Helio and Synclub as projects that can cooperate deeply. The funds participated by Helio users can be used for staking of BNB Chain nodes. At the same time, users obtain corresponding LSTFi tokens and can re-stake on Helio, and then lend out stablecoins. This can improve the utilization rate of DeFi funds. At the same time, the leverage ratio of this operation process is not high, but it can prosper BNB Chain's DeFi market and node staking market at the same time, and thus rapidly promote the growth of BNB Chain.
After the merger announcement was issued, He Yi, the head of Binance, the world's largest cryptocurrency exchange, also forwarded it.
In addition, Synclub supports staking on multiple chains such as Polkadot and Cosmos, which means that Helio may also deploy LSTFi on these chains in the future. At the same time, the merger with Synclub also means that the scale and overall valuation of the new project will increase significantly. With the increase, projects will also become more competitive in the LSTFi market.
What opportunities does Helio bring us?
Of course, for us investors, how to seize the opportunity to participate in Helio's layout and obtain the development dividends of the project is what everyone is most concerned about. Next, we will introduce them one by one.
1. Participate in staking to obtain high returns
We can obtain HAY tokens by staking BNB, and then achieve high yields by forming LPs, or directly purchase HAY tokens and form LPs with stablecoins to increase yields.
By clicking the "+" sign on the Helio page
Then we enter the amount of BNB we want to stake to deposit the tokens. Then we click Borrow on the main interface to set the pledge rate and the amount of stablecoins we want to borrow, and confirm the execution. After completion, we can see the corresponding HAY tokens in the wallet.
Then we can stake HAY alone, or we can form an LP of HAY and stablecoins to conduct liquidity mining and obtain additional income.
In addition, Helio has also launched an alarm function. By binding our wallet, we can use TG to remind us to deal with liquidation risks in a timely manner. This effectively prevents possible liquidation risks and is very user-friendly.
2. Interactive potential airdrops
Whether compared with MakerDAO's DAI or AAVE's stablecoin GHO, Helio needs to issue governance tokens in its economic model to achieve further development in the future. At the same time, in the official statement of the merger between Helio and Synclub, we also saw the description of governance tokens. In addition, neither Helio nor Synclub has issued governance tokens yet. The governance of the new token will include Helio and Synclub. This is also a clear good news. Therefore, the possibility of the project issuing coins in the future is very high, and for users who are looking forward to participating in the airdrop, it is a good opportunity for interaction.
In addition, according to Helio’s official introduction, HELIO token lending and liquidity incentives will be launched in the future, and through the merger with Synclub, the official will also launch more staking incentive functions in the future. We can also continue to look forward to the launch of the LSTFi function, as well as the ETH LST and other more liquidity staking products mentioned by the team to empower potential governance tokens.
Code security and the team's emphasis on the community
For projects, code security is also of great concern to participants. Many projects are often stolen due to code vulnerabilities, which ultimately causes considerable asset losses. Helio's contract code has currently passed two audits by Certik, PeckShield, Verdise, and Solowmist, which means that the project code has been audited five times, and security is also guaranteed.
In addition to the security of the code, the team's operation of the project and its attitude towards community investors are also crucial. For example, in December 2022, due to the Ankr vulnerability, 10 trillion aBNBc were minted, causing huge losses to Ankr. Because Helio accepted BNB pledges, it was also affected. The hacker's cashing out caused the HAY pool and the liquidity pools of some other projects to be affected. Helio Protocol also suffered some losses due to the Ankr incident.
After the incident, the Helio team destroyed HAY tokens immediately to stabilize the price of HAY, and actively assumed the corresponding bad debt responsibility (after consultation with Ankr, Ankr took the responsibility). This also positively reflects the project team's responsible attitude towards the community and users, and also indirectly shows that the Helio team has the corresponding financial strength to bear possible losses.
Summarize
For our users, LSTFi is a direction that can influence the development of DeFi. On the one hand, everyone can get a good rate of return by participating in LSTFi, and on the other hand, they can also interact with Helio and get airdrop opportunities later. Helio obtains value discovery through HAY and further expands HAY's application scenarios. The merger with Synclub will further provide more LSTFi products. In essence, this is also a manifestation of the project's expansion and further expansion.