The DeFi landscape within the Sui ecosystem has demonstrated remarkable growth throughout 2024, a trend that continues to accelerate into 2025. Data from leading analytics platforms reveals that Sui's Total Value Locked (TVL) surpassed the $2 billion mark in the first quarter of 2025, representing a substantial increase compared to previous quarters. This growth is accompanied by surging decentralized exchange (DEX) volumes and consistently high user activity, reflecting strong market confidence in the Sui network.
As the ecosystem expands, the demand for SUI token staking has grown exponentially. However, users often face a dilemma: balancing liquidity needs with staking rewards, especially when compared to higher yields available on networks like Ethereum and Solana. The current average annual percentage rate (APR) for liquid staking tokens (LSTs) on Sui hovers around 2.33%, with direct validator staking sometimes offering even lower returns.
The Haedal Advantage: Innovative Liquid Staking Solutions
Haedal, an award-winning project from the Sui Liquid Staking Hackathon, has emerged as a leading solution to these challenges. The protocol has rapidly gained market traction, achieving over $188 million in TVL since launch. What sets Haedal apart is its innovative approach to liquid staking, addressing both yield optimization and user experience concerns.
The protocol's liquid staking token, haSUI, maintains over $150 million in active liquidity across various DEXs and DeFi protocols within the Sui ecosystem. Through strategic partnerships with leading Sui projects including Cetus, Turbos, Navi, Scallop, and Mole, Haedal has established a highly synergistic DeFi ecosystem where haSUI has become one of the most actively traded LST assets.
Addressing the Yield Challenge: Lower Costs, Higher Returns
Haedal's approach to improving staking yields focuses on two primary strategies: reducing costs and increasing revenue opportunities.
Dynamic Validator Selection
Unlike many LST providers that bind tokens to specific validators, Haedal implements a dynamic validator selection system. This approach continuously monitors all network validators and automatically stakes with those offering the highest net APR, typically those charging 0%-2% commission fees. Similarly, when users unstake, the protocol selects validators with the lowest APR for withdrawal. This dynamic method ensures haSUI consistently maintains the highest native APR across the ecosystem.
Overcoming MEV Limitations
Maximal Extractable Value (MEV) presents significant challenges for DeFi ecosystems, often resulting in increased transaction costs and poor user experience due to front-running and sandwich attacks. Haedal addresses these concerns through its innovative Hae3 system, which introduces multiple revenue-enhancing products while mitigating MEV-related issues.
Introducing Hae3: A Multi-Faceted Yield Enhancement System
The Hae3 ecosystem comprises three core components designed to work together seamlessly, providing users with enhanced yields while maintaining security and decentralization.
HMM: Advanced Market Making for Enhanced Returns
The Haedal Market Maker (HMM) system represents a breakthrough in decentralized market making, offering three distinct advantages:
- Oracle-Based Pricing: HMM provides concentrated liquidity based on oracle pricing rather than pool status. With price updates every 0.25 seconds, this ensures liquidity remains aligned with fair market prices across aggregators.
- Auto-Rebalancing and Market Making: The system automatically rebalances liquidity based on asset conditions, potentially converting impermanent loss into "impermanent gain" through strategic buying low and selling high during market fluctuations.
- MEV Resistance: HMM's architecture naturally defends against MEV attacks, protecting trading profits from front-running and sandwich attacks.
During its two-month testing phase, HMM captured approximately 10-15% of total DEX volume, contributing 0.92% additional APR to haSUI's overall yield. The haSUI APR has stabilized at 3.5%, significantly outperforming other LSTs on Sui.
haeVault: Professional-Grade Liquidity Provision for All Users
Liquidity provision typically requires significant expertise and constant monitoring, creating barriers for many users. haeVault eliminates these complexities through an automated liquidity management layer built on AMM DEXs.
Key features include:
- Simplified Operation: Single-click deposits enable immediate participation
- Complete Transparency: Users can clearly monitor performance and returns
- Fully Automated Management: No ongoing maintenance required beyond initial deposit
- Competitive Yields: Professional strategies deliver superior returns compared to traditional LP approaches
Unlike CEX market makers who profit from bid-ask spreads, haeVault generates returns from transaction fees generated by its active liquidity on DEXs. The platform is designed to attract substantial TVL, potentially capturing significant fee revenue from mainstream asset trading pairs.
haeDAO: Community-Governed Protocol Liquidity
As HMM and haeVault accumulate TVL, the Hae3 system is positioned to capture substantial trading fee revenue across the Sui ecosystem. The protocol implements a transparent revenue distribution model:
- 50% dedicated to enhancing Haedal LSTs' APR
- 10% allocated to team operations for long-term sustainability
- 40% directed to the Haedal treasury as protocol-owned liquidity
Initially, treasury funds will be reinvested into Haedal products to expand liquidity. As the ecosystem matures, haeDAO will assume governance of the treasury, empowering the community and Haedal token holders.
The Future of Haedal and Sui Staking
Haedal's evolution from a focused liquid staking product to a comprehensive staking solution with the Hae3 ecosystem demonstrates the protocol's commitment to addressing market needs through technological innovation. As the product matrix continues to develop, balancing innovation with user experience while maintaining technical leadership and deepening ecosystem partnerships will represent the team's primary challenges.
The market will closely watch Haedal's performance as it navigates these challenges while continuing to deliver superior staking yields and user experiences within the Sui ecosystem.
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Frequently Asked Questions
What makes Haedal different from other liquid staking solutions?
Haedal employs dynamic validator selection to ensure optimal yields and introduces innovative products like HMM and haeVault that generate additional revenue streams beyond basic staking rewards. The protocol also focuses heavily on security with multiple audits and real-time monitoring systems.
How does HMM generate additional yield for stakers?
The Haedal Market Maker system provides concentrated liquidity based on oracle pricing, automatically rebalances positions to capture market movements, and defends against MEV attacks. These capabilities allow it to generate fee revenue that supplements base staking yields.
Is haeVault suitable for beginners?
Yes, haeVault is designed specifically to make professional-grade liquidity provision accessible to all users. The automated system handles complex tasks like price range determination, position rebalancing, and monitoring, allowing users to benefit from sophisticated strategies with simple single-click deposits.
What security measures does Haedal implement?
Haedal utilizes multi-signature mechanisms, real-time risk monitoring systems, and regular audits from top security firms including Certik and SlowMist. The protocol has processed over $1 billion in assets with zero security incidents to date.
When will haeDAO launch?
The haeDAO governance system is expected to launch in Q2 2025, completing the Hae3 ecosystem by enabling community governance of protocol treasury and key decisions.
How does dynamic validator selection improve yields?
By continuously monitoring all network validators and automatically staking with those offering the highest net APR (typically those with 0%-2% commission fees), Haedal ensures users always receive optimal base staking returns regardless of market conditions.