The evolution of decentralized finance (DeFi) continues to accelerate, driven by innovations in liquidity, yield optimization, and community governance. At the forefront of this transformation is Haedal Hae3, a next-generation liquid staking protocol built for the Sui blockchain. By reimagining how value is extracted from transaction flows, Haedal is not only enhancing capital efficiency but also reshaping the future of Liquid Staking Derivatives (LSD) and Decentralized Autonomous Organizations (DAOs).
Why Liquid Staking Derivatives (LSD) Matter
Liquid Staking Derivatives (LSDs) are foundational to modern DeFi. In proof-of-stake blockchains like Sui, Ethereum, and Solana, users stake native tokens—such as SUI, ETH, or SOL—to secure the network and earn rewards. However, staking traditionally locks up capital, reducing its utility.
Enter Liquid Staking Tokens (LSTs): innovative financial instruments that represent staked assets while remaining freely tradable. Protocols like Lido popularized this model by issuing LSTs (e.g., stETH), allowing users to earn staking yields and deploy their tokens across DeFi applications—such as decentralized exchanges (DEXs), lending platforms, or collateralized debt positions (CDPs).
This dual-use model unlocks powerful yield-compounding strategies. For example, a user can stake SUI, receive an equivalent amount of haSUI (Haedal’s LST), then use haSUI in liquidity pools or as collateral—effectively earning multiple streams of income from a single asset.
👉 Discover how next-gen staking protocols are boosting yields on Sui with innovative DeFi integration.
The Current State of LSD in the Sui Ecosystem
Despite rapid growth, Sui’s LSD adoption remains underdeveloped compared to Ethereum and Solana. One key reason: low average Annual Percentage Rate (APR).
Currently, most LSTs on Sui offer around 2.33% APR, with many validators providing even less due to high commission fees (typically 4–8%). In contrast, leading protocols like Lido (~3.1% APR) and Jito on Solana (~7.85% APR) deliver significantly higher returns. These disparities discourage users from moving their assets off centralized exchanges (CEXs) and into on-chain DeFi ecosystems.
For any blockchain aiming to foster a thriving DeFi environment, competitive LSD yields are essential. High-yield, low-risk LSTs attract capital, deepen liquidity, and enable complex financial strategies—exactly what Sui needs to scale.
The Evolution of LSD Product Strategy
To close the yield gap, LSD protocols must pursue two complementary strategies: reducing costs and generating new revenue streams.
Cost Optimization: Smarter Validator Selection
Most existing LSTs on Sui are tied to individual validators. While simple, this approach lacks optimization—users may be assigned to lower-yield validators with high commissions.
Haedal Protocol introduces dynamic validator selection. It continuously monitors all validators on Sui and routes deposits to those with the highest net APR—typically those charging 0–2% commission. During unstaking, it selects lower-APR validators to minimize impact on network balance.
This intelligent routing ensures haSUI consistently achieves among the highest native staking yields in the ecosystem.
Revenue Generation: Beyond MEV
While cost savings help, true yield enhancement comes from additional income sources. Traditionally, DeFi relies on three core revenue models: staking, lending, and trading fees.
Many LSDs turn to Maximum Extractable Value (MEV) for extra profits—capturing value from transaction ordering. However, MEV often harms end-users through front-running and sandwich attacks, increasing slippage and eroding trust.
We believe MEV reflects immaturity in DeFi design. Instead of exploiting users, Haedal proposes a healthier alternative: extracting value directly from organic transaction fees via its flagship product—Hae3.
Hae3: Capturing Value from Sui’s Growing Transaction Flow
Sui has seen explosive growth in DEX trading volume since Q4 2024—surpassing established chains like Polygon, Tron, and Avalanche. This surge generates substantial transaction fee revenue—a sustainable, user-aligned income source.
Hae3 leverages this trend through two core products: Haedal Market Maker (HMM) and haeVault.
4.1 Haedal Market Maker (HMM): Oracle-Driven Liquidity
Most DEX pricing lags behind centralized exchanges (CEXs), creating arbitrage opportunities. HMM addresses this by integrating real-time oracle pricing into liquidity provision.
Key features:
- Oracle-based pricing: Updates every 0.25 seconds to reflect fair market value.
- Automated rebalancing: Dynamically adjusts liquidity to capture volatility and potentially convert impermanent loss into "impermanent profit."
- MEV resistance: Prevents front-running and sandwich attacks by aligning prices with trusted external data.
After two months in beta, HMM captured 10–15% of Sui’s total DEX volume with just $850K in TVL—boosting haSUI’s APR to a stable 3.5%, including a +0.92% boost from HMM-generated fees.
4.2 haeVault: Democratizing Professional Market Making
Most users avoid providing liquidity due to complexity: choosing price ranges, monitoring positions, managing rebalancing—all while fearing impermanent loss.
Meanwhile, professional market makers dominate DEX yields using narrow spreads and automated bots.
haeVault changes this. It’s an automated liquidity management layer that:
- Allows one-click deposit of any asset.
- Automatically adjusts price ranges and rebalances based on market conditions.
- Delivers transparent PnL tracking.
- Enables ordinary users to earn returns comparable to pro LPs.
Unlike HMM (focused on protocol-level liquidity), haeVault is designed for mass adoption. As TVL grows, it will capture significant DEX fee revenue—further boosting yields for haSUI holders.
👉 See how automated vaults are simplifying DeFi participation for everyday users.
4.3 haeDAO: Community-Governed Growth
All profits from HMM and haeVault feed into a sustainable economic loop:
- 50%: Boost LST yields.
- 10%: Fund protocol development.
- 40%: Allocate to the Haedal Treasury as Protocol-Owned Liquidity (POL).
Initially reinvested to grow liquidity, the treasury will eventually be governed by haeDAO, launching in Q2 2025.
By locking HAEDAL tokens into veHAEDAL, users gain voting power over:
- Treasury asset allocation
- Liquidity distribution across products
- Reward multipliers in haeVault
- Major protocol upgrades
This creates a self-sustaining ecosystem where yield growth fuels governance participation—and vice versa.
Expanding the Hae3 Ecosystem: Support for Walrus LST
Haedal is expanding beyond SUI. Soon after Walrus’s Token Generation Event (TGE), Haedal will launch haWAL, its liquid staking derivative for Walrus storage tokens.
With smart contracts completed and undergoing third-party audit, haWAL will integrate fully into the Hae3 suite—offering staking rewards, yield optimization via haeVault, and future governance rights in haeDAO.
We believe Walrus will become a cornerstone of decentralized storage in Web3—and Haedal is ready to empower its community from day one.
Frequently Asked Questions (FAQ)
Q: What makes haSUI different from other LSTs on Sui?
A: haSUI combines dynamic validator selection for higher base yields with revenue from HMM and haeVault—delivering sustained APR above 3.5%, one of the highest in the ecosystem.
Q: How does HMM avoid MEV-related losses?
A: By using oracle-based pricing instead of pool-based pricing, HMM eliminates price lag that MEV bots exploit—making transactions safer and more efficient.
Q: Can anyone use haeVault?
A: Yes! haeVault is designed for all users—no experience needed. Just deposit assets and let the system manage liquidity automatically.
Q: How will haeDAO impact yield distribution?
A: veHAEDAL holders can vote to increase yield multipliers in haeVault or redirect treasury funds—giving the community direct control over yield optimization.
Q: When will haeVault launch?
A: The Alpha version is expected within weeks. Stay tuned via official channels for updates.
Q: Is my capital safe using Haedal products?
A: Security is paramount. All smart contracts undergo rigorous audits, and protocol design prioritizes capital preservation through diversified strategies and MEV protection.
Final Thoughts
The current 3.5% APR for haSUI is just the beginning. Inspired by pioneers like Jito—but committed to user-aligned economics—Haedal aims to bring double-digit yield opportunities to Sui through Hae3.
By capturing value from real transaction flow—not exploitative MEV—we’re building a healthier, more sustainable DeFi future.
With HMM already live, haeVault launching soon, and haeDAO on the horizon, Haedal is assembling the full stack of next-generation DeFi infrastructure.
The era of passive staking is ending. The age of intelligent yield is here.
Let’s Haedal.