What is HAY? Your ultimate guide
By Peter Henn
10:00, 10 December 2022
HAY in effect, a stablecoin that allows itself to be not quite as stable as it otherwise might be. So how does HAY work? What is HAY used for? Let’s see what we can find out about this token.
BNB/USD price chart
Stablecoins explained
Before we look at the HAY cryptocurrency itself, a word on stablecoins and how they work.
The idea behind stablecoins is an extension of the volatility of many cryptocurrencies. Because prices can fall and rise pretty substantially in a very small period of time, many people who might otherwise be open to the idea of investing in crypto are put off. On the other hand, there are many issues that crypto enthusiasts might have with a traditional, fiat currency. One of the reasons that cryptocurrencies have become as successful as they have is that hardline crypto fans believe that there are potential concerns about privacy, or rather the lack of privacy, surrounding traditional fiat currencies. There are also some people angered at collective reliance on centralised financial institutions such as banks and regulators, squeezing out those people who do not have bank accounts. These are the people for whom the whole world of decentralised finance (DeFi) was designed to help. The slow speed of fiat transactions is something else that comes in for frequent criticism, and also the high fees charged to those who need to send money internationally.
However, cryptocurrencies can be incredibly volatile and risky. Stablecoins were set up, to basically serve as a kind of compromise. The idea is that you have the stability of traditional fiat, while you have the privacy, flexibility, theoretical low cost and speed associated with crypto, or at least the version of crypto that exists for the commodity’s most enthusiastic evangelists.
Many stablecoins are backed by reserves, consisting of fiat currency and things that are valued in fiat currency. There are also algorithmic stablecoins. These cryptos use another crypto to keep at a certain price. The idea is that they use an algorithm to keep themselves at a level, with a series of checks and balances, designed to stop the coin falling too low or rising too far. If the price falls too low, then tokens are burned, creating another crypto, while if they get too high then the other crypto is burned, creating the algorithmic stablecoin. If this method of working sounds somewhat familiar, then that is because it is not too far off how TerraUSD (UST) maintained its peg to the dollar, being supported by LUNA. TerraUSD’s method of pegging worked perfectly, up to the moment in May 2022 when it stopped working and it became depegged, its price dropped dramatically, and LUNA collapsed, causing a crash which had an impact on the entire crypto market with the reverberations still being felt to this day.
There is also a third kind of stablecoin. This is the crypto-backed stablecoin. The idea is that you have a coin that is backed by more crypto that exists than the actual stablecoin itself.
What is HAY?
Helio Protocol is such a platform, and its stablecoin, called HAY, is backed by Binance (BNB).
HAY has been created with an eye towards the issue of depegging. In an attempt to cover itself, the crypto describes itself as a “destablecoin”. In other words, it is designed to float around a particular value – in this case, one dollar – rather than to be pegged exactly to it. The idea is that, to quote the whitepaper: “Destablecoins aim to achieve stability broadly without an absolute peg to the fiat currencies.
“All currencies are different and have varying reference rates, so price fluctuations should be considered a norm defined by the open market instead of aiming for a sense of absolute price stability at all cost.
“Similarly with destablecoins, it does not aim to achieve absolute price parity with US $1 as a primary objective nor rely on fiat assets as the collateral.”
However, Helio Protocol also appears to somewhat contradict itself, saying that the “de” in destablecoin stands for decentralised. Something else that might concern people interested in terminology is that, because HAY is based on the Binance blockchain, it is, technically speaking, a token rather than a coin. Therefore, while it makes sense to refer to the HAY stablecoin – because stablecoin is pretty much a generic term – referring to the HAY coin is, however, incorrect.
The stablecoin is used as a method of payment and also in loans.
HAY price history
HAY price history from launch to present - Credit: CoinMarketCapLooking at the HAY price history, while, as a de facto stablecoin, the price should have stayed around $1, as we shall soon see, that was not always the case.
HAY first came onto the open market in August 2022, and it stayed more or less at $1 for most of its first few months. Sometimes it was rather higher, as on 24 August, when it briefly shot up to $1.46, and occasionally it was a lot lower, as on 2 December when it plunged to a low of $0.2084. Since then, though, there has been a recovery and, as of 9 December 2022, it was worth about $0.9525.
Final thoughts
The HAY cryptocurrency’s documentation appears to have been written by someone whose grasp of the English language may not be quite as strong as they think it is. At first glance, this might not be a problem – after all, cryptocurrency is a global concept and is certainly not limited to the English speaking world – but the fact that the people behind it were either unable or unwilling to have someone tidy up their copy might point to a lack of attention to detail.
The rather hazy nature of the name “destablecoin” might, too, be something that could stand as a kind of red flag. Since the overall message given out in the supporting documentation is rather along the lines of “HAY is meant to be stable, only it isn’t, only it is”, then one could not blame a potential investor if they decided to take their money elsewhere.
Third, there is not any information as to who actually came up with the Helio Protocol. While it is not that uncommon for a blockchain-based network to have anonymous or pseudonymous founders, this is something that might deter a lot of investors, who might instead prefer to put their money somewhere they have someone to hold to account.
Finally, there is no record of how many HAY there are in total, let alone how many are in circulation at the time of writing (9 December 2022).
As always with cryptocurrency, it is important to be very careful and do your own research, as well as remembering that prices can, and do go down as well as up, while also making sure you never invest more money than you can afford to lose if you are considering investing in HAY.
FAQs
How many HAY are there?
There are no figures available for either the total amount of HAY, nor for the number of HAY in circulation as of 9 December 2022.
Who created HAY?
HAY was created by an anonymous founder or founders in 2022.
Who owns HAY?
HAY is owned by the people who have bought the HAY cryptocurrency.
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