Hylo’s Model: Reaching $100M TVL with a Fully Collateralized Onchain Stablecoin

Within the DeFi landscape, most stablecoins continue to depend on oracles, fiat assets, or external custodians. Hylo takes a fully onchain approach, using a shared collateral pool backed by yield-bearing LSTs such as $JitoSOL. The model is designed to minimize external dependencies and reduce risks associated with centralized control or oracle inaccuracies.

Tokens Structure & TVL Development

Hylo’s system operates with two tokens that together maintain balance in the collateral pool. Depositors provide LSTs and mint either $hyUSD, a USD-pegged stablecoin, or $xSOL, a leveraged token tied to the same collateral source.

According to onchain data, Hylo’s total value locked increased from roughly $5.6M in early August to more than $100M in three months. The protocol has now operated for over six months, with most of its growth taking place during the third quarter of 2025.

As of November 2025, $hyUSD has a circulating supply of approximately $37.7M and is over-collateralized at 164.7%. Its returns come directly from Solana staking rewards rather than lending or trading mechanisms.

$xSOL serves as a counterbalance within the pool, absorbing price fluctuations in order to help keep $hyUSD’s value near $1. Data shows $xSOL’s recent leverage is about 2.54 times, with its price moving between $0.8 and $3.12 and currently around $1.11. Its circulating supply of 21.7M tokens results in a market cap near $26.9M.

Liquid Staking Extensions: $hyloSOL and $hyloSOL+

Hylo has also introduced liquid staking derivatives called $hyloSOL and $hyloSOL+. These tokens allow users to stake $SOL or existing LSTs while keeping their assets transferable.

The $hyloSOL pool currently holds more than 165K $SOL, producing yields up to 18.53% APY in recent epochs, partly due to MEV capture and validator contributions. The token’s market cap is about $27.4M.

$hyloSOL+ redirects staking rewards to support $hyloSOL’s returns and protocol operations. Holders receive a five-times multiplier in Hylo’s Season 0 XP program. Current supply is about 49.3K tokens, with a market cap of around $8.1M.

$shyUSD and Staking Participation

Users can stake $hyUSD to earn $shyUSD. Totaly 67.3% of the $hyUSD supply, worth about $25.3M, is currently staked. $shyUSD trades near $1.13 and has delivered an average yield of 17.6% over seven days and 15.8% over 30 days. These returns remain higher than those of base LSTs such as $JitoSOL or $mSOL.

Revenue Performance

Hylo’s revenue is generated mainly from swap fees between $hyUSD and $xSOL and from a share of $JitoSOL staking yields. Onchain data indicates that revenue began to grow in July. Before that, cumulative income was around $16K, while by November it had surpassed $1M.

The highest recorded daily revenue occurred on October 28, reaching roughly $33K. About $18K, or 54% of that total, came from $hyUSD swap fees. This suggests internal swap activity is a major contributor to the protocol’s income.

Looking Ahead

Hylo provides a case study for whether DeFi can maintain stability and yield entirely through onchain collateralization. The first six months have shown considerable growth in participation and TVL, yet questions remain about its performance in periods of lower staking rewards or higher market volatility.

For Solana’s broader ecosystem, Hylo illustrates one approach to building LST-backed stable assets without external dependencies. Future data will determine whether the model can sustain its stability and user engagement over time.

This piece is part of our Solana Data Insights series. Make sure to subscribe to Solana Data Insights for weekly onchain analysis.

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