Hubble Protocol

Hubble is a decentralized finance (DeFi) protocol based on Solana. Hubble’s core product is USDH, a decentralized stablecoin that can be borrowed in exchange for your crypto assets.

Users can deposit multiple crypto assets such as SOL, BTC, ETH and others to borrow USDH. In contrast, USDH can be used to serve a variety of purposes across Solana DeFi.

USDH

USDH is a crypto-backed stablecoin pegged to the US Dollar. USDH is fully secured by a basket of crypto assets deposited in a Hubble Smart Contract.

USDH is unique to Solana and can be kept in any Solana wallet. For every 1 USDH in the market, more than 1 dollar of crypto is deposited in Hubble.

All existing USDH is printed from the Hubble Protocol. Users can deposit their crypto assets on Hubble and print USDH. By depositing a deposit, a user allows USDH to be printed and thus puts more USDH into circulation.

As in traditional Finance, a stable currency is required in DeFi. USDH is a Solana-specific stable token that can be a store of value, a medium of exchange, or a unit of account in DeFi.

Once USDH is received from Hubble by printing, exchanging on the open market, or receiving from another organization, it can be used as a means of payment to earn Solana-wide payback or to earn local rewards on Hubble through Hubble Native. 

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Mechanism

Hubble will offer multiple USDH borrowing vaults with various asset combinations and vault-specific parameters such as Stability Fees and Deposit Caps. USDH debts are guaranteed by a combination of Hubble’s USDH Vault (Stability Vault) and bots that facilitate market-based liquidations.

The USDH that users deposit into the USDH Vault is used to pay off doubtful loans, while depositors earn a net ~10% difference in liquidated assets. In addition, users who deposit USDH in the USDH Vault earn HBB, Hubble’s local token.

In the later stages of development, the protocol will launch various products and services to further benefit the platform and USDH itself.

You can take a loan in USDH and then use it on Solana to get a return. After completing this position, you can return to Hubble and pay back the debt. At the end of the process, you get your deposit back and receive the profit from distributing your stablecoins on DeFi. If the price of your collateral has increased, you will also benefit from that price movement.

Easy and Cheap Borrowing

SOL, BTC, ETH, etc. owners are motivated to keep their portfolios on an upward trajectory, they can invest their assets and borrow USDH to use in various protocols on Solana. 

After paying back their debts, users will be able to access their collateral again. If the value of their collateral increases while they are being deposited, they will receive the entire value back after paying off the debt.

Loans do not have a specific term, so debtors can pay back their debts at any time.

What Can Users Do on Hubble?

With Hubble’s borrowing platform, you can:

  • Borrow USDH as much as you want,
  • Deposit multiple cryptocurrencies to print USDH: SOL, BTC, ETH, mSOL, stSOL, daoSOL, RAY, SRM, FTT,
  • Get a positive interest return on collateral deposits (earn when borrowing),
  • Earn protocol rewards by staking HBB,
  • Earn USDH from liquidations by depositing USDH in the Stability Vault (formerly the Stability Pool).

Hubble combines various features into a single borrowing platform that improves capital efficiency in various ways.

Hubble allows you to keep your SOL in hand as its value increases, while borrowing USDH to deploy it in DeFi if you want to keep it in SOL for a long time.

Until August 2022, the platform will offer a large number of vaults with different parameters and different combinations of collateral assets. The parameters of each vault will be adapted according to the risk associated with the assets it contains.

How to Use Hubble?

Hubble has its own decentralized application (dApp), where all services are offered on a single integrated platform. All you need to use Hubble is a Solana wallet.

Security

Hubble is extremely sensitive about security. There are many more lines of code for testing than for the actual smart contract function. Code reviews are extremely strict and security audits are carried out regularly, with five completed so far. The considerations that are paid attention to for safety are as follows:

  • Integration tests
  • Stress tests
  • Security tests 
  • The Soteria audit tool 
  • Property based tests, fuzzing 
  • Asset-based Deposit caps
  • Withdrawal flow caps

Since USDH is not backed by fiat money, regulatory risks should not affect the viability of the token. As regulations for DeFi begin to be made, Hubble plans to align itself with a regulatory framework that will increase the mainstream adoption of DeFi, as well as Hubble services.

HBB Token

Hubble delivers value to its community through HBB staking, allowing users to earn rewards generated by the protocol. In the future, HBB will be used as Hubble’s governance token, which will allow users to direct the protocol decision-making process.

Building on the borrowing protocol, Hubble will offer stake mechanisms to add more value to HBB stakeholders while supporting the value of HBB, as well as infrastructure that creates unique returns.

Funding

The Hubble Protocol announced that Multicoin Capital recently participated in a strategic fundraising round. By providing a $5 million capital injection, Multicoin Capital will support Hubble’s mission to make USDH one of the leading crypto-backed stablecoins in DeFi.

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With $5 million in funding from Multicoin Capital, Hubble’s total private funding amount has reached $15 million. Previous fund-raising rounds have been led by Delphi Digital, DeFiance Capital, Crypto.com Capital was led by Digital Currency Group, Decentral Park Capital, CMS, ParaFi, Jump Capital, Spartan Group, Mechanism Capital and DeFi Alliance.

Summary

In summary, Hubble is a decentralized finance (DeFi) protocol built on the Solana blockchain. In phase 1 of development,  Hubble allows you to borrow USDH against multiple assets. Borrowing USDH allows users to access liquidity in long-term holding tokens.

Hubble’s USDH has become the most mapped Solana-specific stablecoin in both traditional AMM and CLMM liquidity pools on almost every Solana DEX. Overall, USDH is second only to USDC for all stablecoins related to this metric.

References

  • https://blog.hubbleprotocol.io/
  • https://docs.hubbleprotocol.io/

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