The Haedal Protocol is a decentralized finance (DeFi) platform built on the Sui blockchain. It focuses on liquid staking and liquidity provision through a market maker model called Haedal Market Maker (HMM).
By blending staking with DeFi, Haedal aims to optimize capital use and yield potential for users. Let’s take a closer look at the Haedal Protocol, its structure, liquid staking system, the Haedal Market Maker, and their roles within the Sui ecosystem.
What Is Haedal?
The Haedal Protocol is a liquid staking platform designed to support the Sui blockchain, a layer 1 blockchain known for its scalability and low transaction costs.
Haedal allows users to stake SUI tokens, the native cryptocurrency of the Sui network, to help secure the blockchain. In return, they receive a liquid staking token (LST) called haSUI. This token enables users to effectively unlock their liquidity and participate in DeFi activities without sacrificing staking rewards, addressing the trade-offs found in traditional staking models.
Liquid Staking with Haedal
How liquid staking works
Liquid staking allows users to stake assets while retaining liquidity, unlike traditional staking, where assets are locked. In Haedal, users stake SUI tokens to support Sui’s validator network, which secures the blockchain. In return, they receive haSUI, a yield-bearing token that represents their staked SUI and accrues validator rewards.
Haedal offers two staking modes:
Automated Staking: The protocol selects efficient validators, simplifying the process for users with a one-click experience.Manual Staking: Users choose specific validators based on their annual percentage yield (APY), offering more control.
Once staked, haSUI is minted and deposited into the user’s wallet.
Utility of haSUI
The haSUI token is designed to integrate seamlessly into Sui’s DeFi ecosystem. It can be used in:
Decentralized exchanges (DEXs): For trading or providing liquidity in pools (e.g., haSUI/SUI on Cetus DEX).Lending protocols: As collateral or for borrowing.NFT marketplaces: For purchasing or trading NFTs.Stablecoin protocols: For stablecoin-related DeFi activities.
This flexibility allows users to earn staking rewards while participating in yield-generating DeFi strategies, enhancing capital efficiency.
The Haedal Market Maker (HMM)
The Haedal Market Maker (HMM) is an automated market maker (AMM) designed to optimize liquidity for haSUI and other assets on Sui. Unlike traditional AMMs, HMM uses protocol-owned liquidity, initially funded by Haedal, to provide efficient trading and enhance yields for haSUI holders.
As of May 2025, Haedal is among the largest AMM Sui by daily trading volume, with over $900 million in total volume and a TVL of roughly $1 million, according to DefiLlama. HMM charges a 0.04% trading fee, with 50% allocated to incentives, such as boosting haSUI yields.
Key mechanisms of HMM
1. Dynamic liquidity concentration: Unlike traditional AMMs that distribute liquidity across an infinite price range using the constant-product formula (x * y = k), HMM concentrates liquidity within specific price ranges likely to see trading activity. It uses a non-linear leverage factor to adjust liquidity dynamically, aligning with real market conditions to minimize slippage and optimize capital use.
2. Oracle-based Pricing: HMM integrates high-frequency oracle price feeds (e.g., Pyth Network) to align liquidity with real-time market prices. This reduces impermanent loss risk for liquidity providers and can even generate “impermanent profit” by capitalizing on price movements, complementing other AMMs and order books on Sui.
3. Inventory management: HMM maintains pool balance by adjusting asset prices dynamically. If one asset in a pool (e.g., SUI in a SUI-USDC pair) depletes, HMM increases its price to encourage selling and discourage buying, which helps restore the equilibrium.
Capital efficiency and risk management
HMM leverages Sui’s high transaction-per-second (TPS) capacity to adjust liquidity in volatile pairs, minimizing drawdowns caused by market fluctuations. Additionally, HMM is resistant to Miner Extractable Value (MEV) attacks, such as front-running and sandwich attacks, ensuring stable yields for users.
Funding and profit distribution
HMM operates using Haedal’s protocol-owned liquidity, eliminating the need for external liquidity providers in the early stages of the protocol. According to the official documentation, the initial funds will be provided by the Haedal team, with profits reinvested continuously to scale liquidity:
40% to the haSUI Treasury (in SUI), enhancing haSUI’s APR.50% for HAEDAL token buybacks, distributed as rewards to veHAEDAL stakers.10% to Haedal’s protocol treasury for long-term sustainability.
HAEDAL and veHAEDAL
HAEDAL is the native governance token of the Haedal Protocol. It has a total supply of 1 billion units and a 7-year release schedule.
Haedal introduced veHAEDAL as a vote-escrowed token for governance and staking rewards. Users can lock HAEDAL tokens for 1 to 52 weeks to receive veHAEDAL. Longer lockups yield more veHAEDAL. Benefits include:
Weekly staking rewards.Amplified yields in Haedal’s farm modules.Voting power in Haedal DAO proposals.
HAEDAL on Binance HODLer Airdrops
On May 21, 2025, Binance announced HAEDAL as the 19th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from May 10 to 13 were eligible to receive HAEDAL airdrops. A total of 30 million HAEDAL tokens were allocated to the program, accounting for 3% of the total token supply.
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