On August 11th, Helio Protocol received $10 million from Binance Labs, the venture division of cryptocurrency exchange Binance, indicating a significant investment in the platform’s development into a liquid staking environment. This financing highlights the potential of Helio Protocol as well as the rising importance of liquid staking in the decentralized finance (DeFi) industry.
A representative from Binance Labs reinforced the company’s upbeat view on liquid staking by pointing out the significant increase in total value locked (TVL) inside “LSDfi protocols,” which stand for liquid staking derivative finance protocols. These protocols expand the use cases for liquid staking tokens, stimulating staking activity and speeding the sector’s development, eventually improving capital efficiency.
However, Binance’s Half-Year Report, which was released in July, issued a warning about possible risks related to liquid staking. It identified price swings, cutting risks, and smart contract weaknesses as warning signs.
By April 2023, liquid staking has surpassed decentralized exchanges (DEXs) in terms of TVL dominance, according to Binance’s July report. Although the paper foresaw diversity as other projects joined the liquid staking market, the initial focus was on important procedures.
Although liquid staking is becoming more popular, users are urged to practice caution. Liquid staking exposes users to possible flaws since it requires dealing with extra layers of smart contracts. Users entering this space must do thorough research. Additionally, since smart contracts are complicated, changes in market pricing may lead to differences between Liquid Staking Tokens (LSTs) and the underlying tokens.
Helio Protocol’s Turning to Liquid Staking for DeFi Transformation
Within the DeFi environment, liquid staking is an influential factor. Users may generate dividends while keeping token liquidity thanks to it. Liquid staking tokens (LSTs), which are used in DeFi systems, are obtained by staking various representative tokens using this process.
Liquid staking is seen favorably by Binance Labs, especially when it comes to “LSDfi protocols,” which highlight their potential to provide new chances for LST holders looking for rewards. Total Value Locked (TVL) has lately grown significantly for these approaches. It is possible to increase staking and capital efficiency by broadening the uses of liquid staking tokens.
Currently ranked twelfth in DeFi on the BNB Chain, Helio Protocol has a strong community of 11,000 HAY token owners and a $300 million TVL. With the help of Binance Labs and propelled by its advancement in liquid staking, Helio Protocol intends to make a significant impact on the DeFi market.
A representative from Binance Labs said that Helio Protocol intends to debut on Ethereum before expanding to important Layer 2 (L2) networks like Arbitrum and Zksync.
Recent endeavors by Helio Protocol have signaled a transformational stage. The platform has updated BNB deposits since it merged with Synclub, making it possible to convert them easily into several LSTs including AnkrBNB, snBNB, BNBx, and stkBNB. By enabling users to withdraw their chosen LSTs, this innovation improves asset liquidity and usefulness inside the staking environment.