Yield-bearing Tokens
Yield-bearing tokens are a relatively new development in DeFi. Several blockchains support composability with regard to projects building in their ecosystem. This speaks to the interoperability of teams and projects that develop protocols, platforms and products on top of each other and their capacity to exchange data across protocols and platforms. For this reason, many DeFi projects host a variety of vaults or pools where users can deposit and receive a token, called LP token, in return.
Helio Protocol deploys the principle of yield-bearing tokens to allow users to take advantage of their interest-bearing position by borrowing against it. In staking the collateralized BNB in the Helio Protocol, it automatically converts BNB to aBNBc (yield-bearing tokens). These tokens increase in value over time to reflect staking rewards, meaning 1 aBNBc will grow in value when compared to BNB.
The BNB to aBNBc process
User sends BNB to HelioProvider
HelioProvider mints hBNB for the user (as a notarial receipt)
HelioProvider sends BNB to the yield converter router and the converter exchanges them to aBNBc
The converter sends aBNBc to CeVault for storage and accumulation of staking rewards
CeVault mints ceBNBc for HelioProvider
HelioProvider collateralizes ceBNBc through Interaction
The accumulated staking rewards and borrowing interest go back to the Helio Revenue Pool, where the community governance (Helio DAO) decides how it will be used such as buyback-and-burns, fund 3rd party risk assessment consultancy service, held as a reserve pool for risk management, further incentivize active users who borrow and further stake HAY in the protocol, or liquidity providers in DEXes.
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