What is Haedal Protocol?

(Source: HaedalProtocol)

Haedal is a liquidity staking protocol based on Sui that allows anyone to stake their SUI tokens, contributing to the governance and decentralization of the Sui blockchain. Users can receive haSUI as a receipt token, which can be used as liquidity to participate in various DeFi activities and earn additional rewards.

The core mechanism of Haedal Protocol

Haedal’s operation model is very intuitive. After users stake SUI into the Haedal smart contract, the protocol automatically allocates it to multiple stable-performing validators, assisting in the decentralization and security of the Sui blockchain. Unlike traditional lock-up staking, users instantly receive haSUI as a staking certificate. This token has circulation and application value within Haedal and the entire Sui DeFi ecosystem. It can be used to participate in liquidity mining, lending, DEX trading, and various DeFi applications, achieving yield stacking without having to choose between locked-up yields and DeFi operations.

Why choose liquid staking?

Sui adopts the Delegated Proof-of-Stake (DPoS) consensus mechanism, encouraging users to stake their assets with validators to maintain on-chain security. However, the threshold for running validation nodes is very high, making it unfeasible for most users. This is where liquid staking demonstrates its value, allowing users to participate in network governance with SUI without technical burdens through Haedal, while maintaining asset liquidity via haSUI, thereby engaging in multiple yield paths to maximize capital efficiency.

Haedal Market Maker (HMM): Create a dedicated yield engine

In order to expand the use cases of haSUI and enhance its revenue potential, Haedal has launched its self-developed automated market-making module: Haedal Market Maker (HMM). This highly efficient AMM module designed specifically for Sui has several key features:

• Capital efficiency is extremely high: Compared to traditional AMM, HMM can provide excellent liquidity even with a very small liquidity pool, rivaling the concentrated liquidity pools of CLAMM.
• Low-risk volatility: HMM can quickly adjust the price range based on market fluctuations, achieving low drawdown and risk control.
• Anti-MEV Design: Enhancing transaction security and real yield through anti-front-run and sandwich attack mechanisms.

Most of these earnings will flow back to haSUI users and HAEDAL holders, forming an internal circular economy of the protocol.

Protocol revenue mechanism and distribution model

The protocol revenue generated by HMM will be divided into three parts for use:

• 40% flows to haSUI Treasury: increasing the returns and APR behind haSUI, enhancing the attractiveness of staking.
• 50% for HAEDAL buyback and rewards for veHAEDAL holders: creating long-term locking incentives.
• 10% of the protocol revenue is deposited into the Treasury: as long-term operating funds for the protocol.

This revenue-sharing mechanism establishes a positive flywheel where holding tokens means participating, and participating means earning.

The tokenomics of HAEDAL

Total supply: 1 billion (1,000,000,000 HAEDAL), the following is the distribution of HAEDAL tokens:

• Ecosystem Incentives (55%): More than half of the HAEDAL will be used to promote overall protocol adoption, including user rewards, cooperative incentives, and LST application expansion.
• Liquidity Fund (10%): Used for initial liquidity setup, supporting trading depth for centralized or decentralized exchanges, as well as future strategic liquidity deployment.
• Investors (15%): After a 6-month lock-up period, a 12-month linear unlocking method will be adopted to ensure that investors are in sync with the growth rhythm of the protocol.
• Team and Advisors (20%): A 12-month lock-up period is also set, followed by a linear release over 24 months, intended for long-term incentive for core contributors and the development team.

This distribution architecture takes into account promotion, governance, and sustainable operations, providing solid support for the overall ecosystem.

veHAEDAL: Locking, Governance, and Yield Amplifier

veHAEDAL is the governance and locking model of Haedal. Users can exchange locked HAEDAL tokens for veHAEDAL and enjoy the following benefits:

• Yield Increase: Participating in the staking and mining of various Haedal modules will yield a higher multiplier.
• Governance Rights: Participate in governance proposals and voting of Haedal DAO to shape the future direction of the protocol.
• Protocol rewards: A portion of the transaction fees from HMM will be used for HAEDAL buybacks and distributed to veHAEDAL stakers.

This design is similar to Curve’s veToken model, deeply binding user interests with the long-term growth of the protocol.

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Summary

Haedal Protocol is a platform that transcends traditional staking. It is not just about turning SUI into haSUI, but through innovative market-making mechanisms (HMM), a locked governance model (veHAEDAL), and revenue-sharing strategies, it constructs an efficient, self-driven liquid staking economic model. In the DeFi world where liquidity is productivity, Haedal makes every SUI not just a locked yield, but also a driving force for participation in the entire on-chain protocol.