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Treasury & Slashing Mechanisms

Introduction​

The HELIOS blockchain incorporates a treasury system funded by slashed assets from validators and delegators who violate consensus rules. These slashed assets, which originate from multiple external blockchains, such as ETH, BNB, and other staked assets, are redirected into the Helios Treasury to support network sustainability and ecosystem development.

How Slashed Assets Are Handled​

Whenever a validator or delegator is slashed, their staked assets are not destroyed but instead reallocated to the Helios Treasury. This ensures that value is preserved and can be reinvested into the network.

Treasury Utilization​

The treasury funds can be strategically deployed in various ways to enhance the network:

1. Buyback & Token Support​

Accumulated slashed assets (e.g., ETH, BNB) can be repurposed to buy back HELIOS tokens from the market, reducing supply and reinforcing token value.

2. Developer Grants & Ecosystem Growth​

A portion of the treasury can be allocated to developer grants to incentivize innovation within the Helios ecosystem, supporting:

  • Smart contract developers building on Helios
  • New relayers and infrastructure providers
  • Security audits and improvements

3. Validator & Staking Incentives​

The treasury can support staking reward pools, ensuring that validators and delegators receive sustainable rewards over time.

4. Long-Term Reserves & Future Governance Use​

Governance may decide to hold certain assets in reserve or deploy them strategically for ecosystem expansion. Long-term holdings of ETH and BNB provide flexibility in managing economic stability across Helios operations.

Implications for Interchain Assets​

Since slashed assets are collected from multiple external chains, this introduces a unique capability:

  • Burning External Assets: Over time, slashed ETH, BNB, and other tokens could accumulate as "dust" (small amounts from multiple penalties).
  • Converting Value into Helios Utility: These assets can be reallocated via governance to fund grants, liquidity programs, or HELIOS buybacks, effectively making external chain assets usable within Helios.

Governance & Treasury Management​

The Helios DAO has full control over treasury funds and can allocate them based on governance votes. Treasury decisions may include:

  • Adjusting allocation percentages for buybacks, grants, and staking pools
  • Introducing new strategies to optimize fund usage
  • Managing long-term reserves for network stability

Conclusion​

The Helios Treasury provides a powerful mechanism for sustaining network growth, supporting decentralization, and ensuring economic resilience. By redirecting slashed assets into a structured treasury model, Helios can reinvest, optimize staking rewards, and strengthen the overall ecosystem.