Hubble

CDP

Hubble is a decentralized borrowing protocol that lets users borrow the USDH stablecoin against multiple assets as collateral.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Hubble is a decentralized borrowing protocol built on Solana that leverages key stability features from Maker and Liquity. Loans are paid out in the USDH stablecoin which is backed by multiple crypto assets.
What we like less
The borrowing platform is currently centrally controlled by the team with plans to move towards full decentralization in the future.
What it means for you
Offers you a great way to keep the upside of your collateral while earning yield elsewhere by deploying USDH to use across the Solana ecosystem.
Information
Info
Key Metrics
  • TVL: $4M (Rank #154)
  • TVL Ranking by CDP: #13
  • Blockchain: Solana
  • Chain TVL
    • Solana: $4.05M
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by several experienced auditors including Kudelski and Smart State
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Bottom 80% by total value locked increases risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Highly concentrated voting power increases risk
Protocol Design
  • No death spiral concerns
  • Solid controls to prevent oracle price manipulation
  • Isolated markets enable asset risks to be contained to each individual pool without impacting the entire protocol
  • Solid controls in place to prevent risky borrowing
  • Solid mechanisms in place to ensure healthy liquidations
  • Robust methods to accrue protocol reserves
Things to know about Hubble

How Hubble works

Hubble is a decentralized borrowing protocol that allows borrowers to draw loans against multiple assets as collateral. Loans are paid out in USDH, a USD-pegged stablecoin with a minimum collateralization ratio of 120%. The loans are further secured by the USDH vault, a stability pool that contains a portion of the total USDH supply, and a peg stability module (PSM). The USDH vault serves as a stability pool to maintain system solvency as it is used to liquidate the debt in low-collateralized vaults. For depositors into the stability pool, it allows them to commit capital in advance to earn liquidation rewards and HBB token incentives. In general, stability pool depositors will receive more assets (in USD terms) than the amount of USDH burned. This is not without risks as it is still possible for the asset values to drop significantly after a liquidation such that it is worth less than the amount of USDH removed. The PSM is Hubble's primary pegging mechanism that enables zero-slippage swaps between USDH and USDC. Users can either deposit USDC to mint USDH or deposit USDH and redeem USDC. Hubble also has a stability fee that acts as an interest rate. This rate can be increased if USDH falls below peg in order to incentivize borrowers to repay their loans and reduce the circulating supply from the market.

How Hubble makes money

Hubble has a hybrid fee system that consists of a one-time mint fee and stability fees. All loans on Hubble are subject to a minting fee that varies by vault. This fee is added to a user's debt at the time of minting. Stability fees are effectively interest rates the user must pay for borrowing USDH. This fee accrues over time nad varies between vaults. Higher risk assets will generally have higher stability fees, and vice versa.

How you make money on Hubble

You can generate revenue via two different ways on Hubble. First, you can deposit USDH to the stability pool to earn liquidation gains and HBB token incentives. Second, you can stake the HBB token and earn rewards from borrowing fees paid in USDH.