How to DeFi with USDH

Minting USDH to participate in DeFi takes just a few steps. Learn about what you can do with USDH and how to borrow USDH in this step-by-step guide.

Decentralized finance (DeFi) is like a crypto adventure. You can hold SOL or NFTs and wait for their price to rise, or you can join the adventure by participating in DeFi to earn more crypto while you wait.

This article will explain why users borrow USDH and give some examples of how USDH can be used to participate in DeFi. You will also find step-by-step instructions for borrowing USDH.

Remember: There are no guaranteed profits in DeFi, and you can lose everything by participating. Never participate with more than you can lose, do your own research, and this is not financial advice.

🎮Earn More Tokens in DeFi with USDH


👉 Imagine Hubble as a token machine in an arcade.

  • You insert an asset (SOL instead of a paper bill)
  • You get tokens (USDH instead of shiny metal discs)
  • You can use the tokens in tons of machines (DeFi instead of a claw machine) in the arcade (Solana).

🧠 Some of the plays are riskier than others, but if you manage your risk and pay attention, you can get back your tokens and more. Unlike an arcade, though, when you decide to check out you can take your USDH tokens back to the token machine and get back what you deposited.

What happens if USDH loses its peg?
If USDH falls below $1.00, you can buy cheap USDH from a DEX to repay your loan. For example, if USDH falls to $o.98, that saves you 2%, and if USDH somehow falls to $0.90, you save 10%!

When USDH is priced below $1.00, it means there is too much supply and not enough demand on the market. When you and everyone else start buying USDH to repay loans, the price goes back up to $1.00.

USDH is designed to always rise back to $1.00. Borrowers always have to repay their USDH loans to get back their SOL. 

What Can You Do with USDH?

When you borrow USDH, you can do anything you want with it. You can pay your bills, or you can buy a boat—or you can participate in the great DeFi adventure to earn yield from multiple different strategies.

What you don't want to do is lose your ability to repay your USDH loan. Here are several use cases for USDH graded by their exposure to risk.

🕺 Less Risky DeFi with USDH

These strategies are the least risky. They involve participating in DeFi with stablecoins, which should remain pegged at $1.  

⛷️ Riskier DeFi I

These strategies are riskier, because they involve increased smart contract risk. You may also have some exposure to market conditions as they are not 100% stablecoin strategies.

  • Leverage Kamino positions with kTokens on Hubble
  • Leverage Kamino positions with kTokens on Solend

🎲 Riskiest DeFi

These strategies expose you 100% to the market. If you borrow USDH to participate in these strategies, it's possible you might not be able to repay your loan if something goes wrong.

  • Buying NFTs
  • Swapping USDH for other non-stable assets
  • Looping: Borrow USDH with SOL >> Buy SOL with USDH >> Deposit on Hubble >> Borrow more USDH >> Repeat (leveraged trading)
Stablecoins can help you earn profits from DeFi. You don't have to sell your crypto to acquire them. Instead, borrow USDH. USDH helps you HODL your crypto and borrow stablecoins at the same time.

Getting Started: How to Borrow USDH from Hubble Protocol

  • Earn yield from providing concentrated liquidity and leverage up to 20x with Kamino kTokens:

Step 1: Connect your wallet.

Step 2: Choose a vault. Click "Borrow."

Step 3: Choose what tokens to deposit.

You can deposit more than one kind of token at the same time by pressing +.

Hubble accepts a wide range of tokens as collateral.

Step 4: Decide how much USDH to borrow.

This is a personal decision every user must make for themselves. The crypto market can be incredibly volatile, so it's always a good idea to borrow at a safe loan-to-value (LTV).

If your deposit loses too much value while you're borrowing USDH, Hubble will liquidate your assets. The USDH Vault will repay your loan for you, and your SOL will be distributed to USDH Vault stakers.

Note: You keep the USDH you borrowed if you are liquidated, and some of your deposit is returned to your wallet. 

Examples of Unsafe and Safer Borrowing Limits

  • Deposit 1 BTC and borrow USDH at a 75% LTV
  • The loan will be liquidated if BTC falls by 6.25%.
  • Think BTC will fall by 6.25% while you're borrowing?
  • Borrow less USDH until things look more positive.

Step 5: Borrow USDH

Once you've decided on a comfortable LTV and how much USDH to borrow, click the "Borrow" button and approve the transaction in your wallet.

That's it. You're finished borrowing USDH, and you will be directed to the Loans page, where you can view and manage your loans.

Mint USDH and Explore the DeFi Adventure

There are incredible opportunities for earning yield in DeFi, and USDH is a tool designed to help users seek those opportunities. We hope you found this guide to be a helpful tool as well!

If you're interested in learning more about DeFi, USD, check out Hubble's blog. There is plenty to read about USDH, stablecoins, and DeFi:

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