When I see stablecoin projects now, my first reaction is to roll my eyes - how competitive has this track become, and who dares to jump in? But Hylo @hylo_so made me take a second look.

In August, they only raised 1.5 million dollars in the seed round, and in less than four months, the TVL has reached 78 million. This growth curve is either indicative of real skill, or the market makers are frantically inflating the volume. I tend to believe in the former, as the design concept is indeed quite interesting.

Hylo operates on a "twin" model: hyUSD is a stablecoin, and the collateral is neither USDC nor government bonds, but rather Solana's LST (liquid staking token); xSOL provides you with leveraged exposure to SOL. The two tokens are complementary, one seeks stability while the other seeks volatility, but the underlying assets are shared. The brilliance of this logic lies in that it transforms the staking yield from Solana into the "invisible interest" of a stablecoin, while not touching any off-chain assets.

"Purely on-chain, permissionless, and not reliant on market makers, these keywords combined basically say 'I don’t want to repeat the mistakes of UST'. Of course, the price fluctuations of LST itself are also risk points; will it lose its peg in extreme market conditions? We will have to wait for the market to test that."

The Solana ecosystem is currently lacking a reliable native stablecoin. If Hylo can establish itself, the potential for growth is quite significant. Let's observe and build positions for now.