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Stability Pool

The Stability Pool is a new feature introduced in HAI v2, replacing the v1 liquidation system as the primary defense mechanism for maintaining HAI’s peg.

From HAI v1 to HAI v2​

  • In HAI v1
    When a vault’s collateral ratio dropped below the minimum, its collateral was sent to a public auction.
    Any HAI holder could bid to purchase that collateral at a discount, with the winning bids paying back the vault’s debt.

  • In HAI v2
    Liquidations are handled automatically by the Stability Pool.
    Instead of waiting for an auction, HAI from the Stability Pool instantly covers the debt, and the liquidated collateral is distributed to Stability Pool depositors.

    Public auctions still exist, but only as a fallback if the Stability Pool doesn’t have enough HAI to cover the liquidation.

HAI V2 Enhancements & Value Additions​

1. sHAI - Your Stability-Backed HAI​

Receive sHAI, a yield-bearing token, when you deposit HAI into the Stability Pool.

As an sHAI holder, you can:

  • Earn stability fees
  • Collect liquidation profits
  • Accumulate KITE emissions
  • Maintain exposure to redemption rate (RR) directionality
  • And your sHAI remains usable across DeFi ecosystems.

2. Automated Liquidation Profit Sharing (ALPS)​

This real-time system simplifies liquidation exposure and rewards:

  • Liquidated collateral is auctioned at fixed discounts.
  • Protocol automatically buys this collateral with Stability Pool HAI.
  • Gains are auto-sold back into the pool, rewarding depositors instantly in HAI.
  • Public auctions only open if the pool lacks enough HAI.

3. Sustainable, Aligned Incentives​

  • KITE emissions reward sHAI holders.
  • Your position grows in yield and potential governance alignment since sHAI is more than a pass-through token
  • These layers ensure Stability Pool participants are central to HAI’s durability and growth.

Benefits & Risks​

BenefitsRisks
Liquidation gains and yield via sHAICollateral volatility
KITE and stability fee rewardsWithdrawal risk if liquidations happen
Auto-compounded profits via ALPSExposure to protocol dynamics

How to Participate​

  1. Navigate to the Stability Pool section in the HAI app.
  2. Deposit HAI and receive sHAI.
  3. Monitor your sHAI stake - it automatically accrues gains and incentives.
  4. Withdraw HAI and any collected yield when you wish.