Hylo is a DeFi protocol on Solana that lets you mint two tokens, hyUSD, a yield-bearing stablecoin, and xSOL, a leveraged SOL asset, from the same LST-backed collateral pool. This setup avoids liquidations, external oracles, and custodial risk, while staying fully onchain and capital efficient. You can deposit hyUSD for yield, and use xSOL for leveraged exposure to SOL price movements, or you can use hyUSD to provide liquidity on Kamino.
A DeFi protocol on Solana called Hylo has been gaining traction for its innovative approach to stablecoins and leveraged assets. Instead of relying on fiat reserves or external collateral types, Hylo issues both a stablecoin and a leveraged token from the same pool of assets, creating a self-balancing system that can capture yield while offering exposure to SOL’s price movements.
So in this guide, we’ll look at what Hylo is, how it works, and how to mint and utilize its tokens, including over on Kamino, another Solana-based protocol.
Before we carry on though, please be aware of the risks involved when using any DeFi protocol, which include the possibility of frontend attacks, smart contract exploits, stablecoin de-pegs, and high volatility across DeFi and crypto.
What Is Hylo?
The Hylo protocol operates on Solana, and it lets users mint two complementary tokens backed by Solana liquid staking tokens (LSTs):
- hyUSD: a dollar-pegged stablecoin that can be deposited for yield
- xSOL: a leveraged asset that tracks SOL with amplified volatility
Both tokens are created from a single collateral pool composed of LSTs such as JitoSOL and JupSOL, which continue to generate staking rewards while serving as collateral. This design allows the protocol to remain fully onchain and capital efficient, differentiating it from stablecoin models that depend on real-world assets or custodial backing.
Because collateral value is split between the stable and leveraged sides, the system is designed to automatically balance risk, ensuring that the hyUSD token remains stable at $1. For full details about the mechanics at work here, please check the description in the official Hylo documents.
How Hylo Works
Users deposit SOL, stablecoins, or supported LSTs and from this collateral can mint hyUSD (the stablecoin) or xSOL (which represents leveraged exposure to SOL).
The collateral TVL on-protocol equals the value of the hyUSD supply plus the value of the xSOL supply, ensuring full collateralization, and the key idea is that Hylo creates the synthetic long (xSOL) and the stable asset (hyUSD) from the same pool, rather than using debt positions.
This–if all operates according to plan–means there should be no liquidation events, while no external price oracles are required to keep the system balanced.
And in practical terms, this means users can take the low-risk, stable option by minting hyUSD, which is then used for yield returns, or the volatile, leveraged side by minting xSOL.
How to Mint and Stake hyUSD
If you want to mint hyUSD, then head over to the Hylo app, connect your Solana wallet, and click on the Stablecoin tab at the top.
You can then deposit USDC, USDT, SOL, JitoSOL, or JupSOL, and mint hyUSD in return. Note also that this is where you need to go to convert hyUSD back into other tokens.
You can then click on the Earn tab, and…
