Haedal Protocol has emerged as a cornerstone of the Sui blockchain’s decentralized finance (DeFi) ecosystem, redefining liquid staking with innovative infrastructure and a user-centric approach. Launched in 2023 and gaining significant traction by 2025, Haedal enables users to stake SUI and WAL tokens while maintaining liquidity through haSUI and haWAL tokens, blending staking rewards with DeFi flexibility. This analysis explores Haedal’s technology, market position, strengths, challenges, recent developments, and future outlook, offering a critical perspective on its role in the evolving DeFi landscape.
Technological Foundation and Core Mechanics
Haedal Protocol operates on the Sui blockchain, a high-performance Layer-1 network known for scalability, low fees, and parallel transaction execution. Haedal’s liquid staking model allows users to stake SUI or WAL tokens, contributing to Sui’s governance and decentralization, while receiving haSUI or haWAL—yield-bearing tokens that accrue validator rewards. These tokens can be used across Sui’s DeFi ecosystem, including decentralized exchanges (DEXs), lending protocols, and options trading platforms, without sacrificing staking income.
Key components of Haedal’s infrastructure include:
Haedal Market Maker (HMM): Optimizes liquidity on Sui DEXs using oracle pricing and real-time market data, charging a 0.04% fee. From February to March 2025, HMM’s trading volume surged from $59.13 million to $284.15 million, generating $236,000 in fees.
Haedal Vault: Simplifies liquidity provision for users, automating LP position management to maximize returns.
HaeDAO: A decentralized autonomous organization enabling $HAEDAL token holders to govern the protocol via veHAEDAL staking, which also boosts yields and grants revenue shares.
The $HAEDAL token, with a total supply of 1 billion and an initial circulating supply of 195 million, serves as the protocol’s governance and utility token. Its tokenomics allocate 55% to ecosystem incentives, 10% to liquidity, and the rest to team, advisors, and reserves, fostering community growth and sustainability.
Market Position and Competitive Edge
Haedal dominates Sui’s liquid staking market, with a Total Value Locked (TVL) of over $210 million and $150 million in liquidity circulating across DeFi protocols as of May 2025. Compared to competitors like Volo ($50 million TVL) and Suilend ($117.4 million TVL), Haedal’s TVL of $117–120 million (as of April 2025) and 44,000 daily active wallets underscore its leadership. The Sui staking market, with only 2% of $307.48 million staked SUI being liquid, presents significant growth potential, especially when compared to Solana (10.1% liquid) and Ethereum (30.5% liquid).
Haedal’s competitive advantages include:
Deep Ecosystem Integration: Partnerships with Cetus, Scallop, Turbos Finance, and Typus enhance haSUI and haWAL utility, creating a synergistic DeFi hub.
High Yields: haSUI yields increased from 2.58% to 3.21% annualized, with veHAEDAL staking offering up to 231% APY, outpacing competitors.
User Accessibility: One-click staking and an intuitive interface lower barriers for retail and institutional users.
Strong Backing: Seed funding from Hashed, OKX Ventures, Animoca Ventures, and the Sui Foundation validates its credibility and fuels development.
Recent Developments
Haedal’s 2025 milestones highlight its momentum:
Seed Funding (January 2025): Raised an undisclosed amount from top-tier investors to expand infrastructure and DeFi products.
Token Generation Event (April 29, 2025): Launched $HAEDAL, listed on Binance, KuCoin, Bitget, and others, with a 60% price surge post-Binance listing.
HODLer Airdrop: Distributed 5% of $HAEDAL supply to BNB and Sui users, boosting community engagement.
HMM Growth: Climbed to the third-largest AMM on Sui by daily trading volume ($5.69 million, 6.12% of Cetus’s $92 million), despite not being designed as a DEX.
However, a $223 million exploit in Cetus’s liquidity pool in May 2025 led to Haedal suspending its haeVault feature. While Haedal’s core funds and features remained secure, the incident raised concerns about ecosystem dependencies. The team’s swift response and collaboration with Cetus mitigated reputational damage, but it underscores the risks of interconnected DeFi protocols.
Challenges and Risks
Despite its strengths, Haedal faces challenges:
Ecosystem Dependency: Reliance on Sui’s growth and partner protocols like Cetus exposes Haedal to external risks, as seen in the exploit.
Low Liquid Staking Penetration: Sui’s 2% liquid staking rate indicates an early-stage market, requiring Haedal to drive adoption amidst competition.
Regulatory Uncertainty: Global DeFi regulations could impact staking accessibility, potentially limiting growth.
Anonymity of Team: The lack of named founders may deter some investors, despite the team’s blockchain expertise.
Future Outlook
Haedal is well-positioned to capitalize on Sui’s expanding DeFi ecosystem, projected to exceed $1 billion in TVL. Its roadmap includes new modules for retail and institutional users, cross-chain expansion (e.g., BNB Chain), and deeper integrations with Sui protocols. With liquid staking gaining traction—evidenced by Ethereum and Solana’s higher penetration rates—Haedal could capture a significant share of Sui’s $307.48 million staking market, potentially growing its TVL tenfold.
However, success hinges on mitigating risks. Enhancing security through diversified partnerships, increasing transparency about the team, and navigating regulatory landscapes will be critical. The buyback program for veHAEDAL holders and potential airdrops signal a commitment to long-term value creation, but sustained community trust is essential.
Haedal Protocol is a trailblazer in Sui’s liquid staking landscape, combining innovative technology, high yields, and ecosystem synergy to redefine DeFi participation. Its $210 million TVL, strategic partnerships, and robust tokenomics position it as a leader, but challenges like ecosystem risks and regulatory uncertainty require careful navigation. As Sui’s DeFi ecosystem matures, Haedal’s ability to innovate and adapt will determine its longevity. For investors and DeFi enthusiasts, Haedal offers a compelling opportunity, provided they approach with due diligence