The Sui blockchain ecosystem continues to evolve, and at the heart of its DeFi growth is liquid staking—a process that allows users to stake their tokens while maintaining liquidity. Haedal Protocol emerges as a standout project in this space, designed to enhance capital efficiency and user rewards. With its recent Token Generation Event (TGE) and airdrop distribution, Haedal is capturing significant attention for its innovative approach and strong performance metrics.
This analysis explores why Haedal Protocol is positioned as a leading liquid staking solution on Sui, its technological advantages, and what makes it a compelling project for users and investors alike.
The State of Liquid Staking on Sui
Liquid staking is still in its early stages on the Sui network. Currently, the total value of staked SUI is around $307.48 million, but only about 2% of these staked assets are liquid. This is low compared to other major blockchains: Solana has a liquidity rate of 10.1% from its $4.29 billion in staked SOL, and Ethereum boasts 30.5% liquidity from over $102.5 billion in staked ETH.
This gap represents a major opportunity. As the Sui ecosystem expands, demand for liquid staking solutions is expected to grow rapidly. Haedal Protocol, with a Total Value Locked (TVL) of $120 million, is well-positioned to lead this expansion.
How Haedal Enhances Staking Returns
One challenge on Sui has been the relatively low Annual Percentage Yield (APY) for staking, typically around 2.5%. In contrast, stakers on Solana often earn 7–8% APY, and Ethereum offers 3–4%.
Haedal addresses this with a dynamic validator selection mechanism. When users stake SUI, Haedal automatically delegates those assets to validators with the highest available APR. When unstaking, it prioritizes withdrawing from lower-performing validators. This intelligent approach helps maximize returns for users over time.
Additionally, Haedal introduces the Hae3 Framework, which consists of three core components:
- HMM (Haedal Market Maker): Optimizes liquidity across Sui-based DEXs using oracle pricing and real-time market data.
- HaeVault: Simplifies yield farming for users by automating liquidity provision and rebalancing.
- HaeDAO: A decentralized autonomous organization that enables community governance.
Breaking Down the Hae3 Framework
HMM: Capturing DEX Volume and Fees
HMM acts as an active market maker on Sui decentralized exchanges. By leveraging accurate pricing data, it provides deep liquidity and captures a 0.04% fee on all trades it facilitates.
The results have been impressive: between February and March, trading volume grew from $59.13 million to $284.15 million, generating $23,600 in fees with an average TVL of $800,000. After allocating 50% of this revenue to user incentives, the APY for stakers increased from 2.58% to 3.21%—a 24.4% boost.
While Cetus remains Sui’s largest DEX with a daily trading volume of $92 million, Haedal is quickly gaining ground. Its daily volume of $5.69 million is already 6.12% of Cetus’s activity, demonstrating its growing influence.
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HaeVault: Supercharging Yield Farming
For users interested in providing liquidity but wary of the complexity, HaeVault offers a simplified solution. Users can deposit funds without managing LP positions manually.
The vault uses an ultra-narrow rebalancing strategy to maximize returns. For example, in the SUI-USDC trading pair, Cetus offers an APY of 250.8%. HaeVault, however, achieved a remarkable 1117% APY. After deducting a 16% performance fee, users still received a net yield of 938%.
HaeDAO: Community-Led Governance
HaeDAO allows HAEDAL token holders to participate in the protocol’s future. By locking their tokens, users receive veTokens (vote-escrowed tokens), which grant governance rights and the ability to influence key decisions, such as fee structures or new feature deployments.
Competitive Advantages in the Sui Ecosystem
Haedal’s integrated approach sets it apart from other protocols like Volo and Suilend, which focus mainly on basic staking and lending. By combining staking, liquidity provision, and governance into one ecosystem, Haedal creates a synergistic effect that enhances overall returns and user engagement.
Its on-chain metrics further reinforce its competitive position:
- TVL: $117.36 million (comparable to Suilend’s $117.4M and significantly higher than Volo’s $50M)
- Daily Active Wallets: Over 44,000
- Token Holders: 794,000
These numbers indicate strong user adoption and trust in the protocol.
The Role of the HAEDAL Token
The native token, HAEDAL, serves multiple purposes within the ecosystem:
- Governance: Locking tokens grants voting rights in HaeDAO.
- Yield Boosting: Token holders can use HAEDAL to increase APY in vaults.
- Airdrops and Incentives: holders may qualify for future airdrops, a common practice in the Sui ecosystem to reward early adopters.
Investor Confidence and Backing
Haedal has garnered support from well-known venture capital firms, including Hashed, Comma3 Ventures, OKX Ventures, and Animoca Brands. This backing not only provides financial stability but also validates the protocol’s potential and strategic direction.
Frequently Asked Questions
What is liquid staking?
Liquid staking allows users to stake their cryptocurrency assets to secure a network while receiving liquid tokens in return. These tokens can be used across DeFi applications, enabling users to earn staking rewards without locking up their capital.
How does Haedal improve staking APY?
Haedal uses a dynamic validator selection process that automatically stakes users' SUI with the highest-yielding validators. It also redistributes a portion of trading fees generated by its market maker (HMM) to stakers, boosting their overall returns.
What is HaeVault?
HaeVault is a yield optimization product that lets users deposit funds into automated strategies without manually managing liquidity positions. It uses advanced rebalancing to maximize returns from liquidity provisioning.
Can I participate in governing Haedal Protocol?
Yes, by locking HAEDAL tokens, you receive veTokens that allow you to vote on proposals and decisions within HaeDAO, giving you a voice in the protocol’s future development.
Is Haedal only for SUI stakers?
While initially focused on SUI staking, Haedal is built to integrate with the broader Sui DeFi ecosystem. Its products, like HMM and HaeVault, are designed to work with various tokens and DEXs on Sui.
What makes Haedal different from other staking protocols?
Haedal offers a full-suite solution that combines liquid staking, automated market making, and vault-based yield strategies. This integrated approach, along with strong community governance, distinguishes it from simpler staking or lending platforms.
Conclusion: Positioned for Leadership
Haedal Protocol stands out in the Sui ecosystem due to its innovative triple-component framework, strong economic performance, and rapidly growing user base. With liquid staking penetration on Sui still at just 2%, the potential for growth is substantial.
As the Sui network continues to mature, Haedal’s combination of high yields, user-friendly products, and community governance makes it a strong candidate to lead the liquid staking sector. For those looking to deepen their involvement in Sui DeFi, Haedal represents a compelling opportunity.