Note: This article is not financial advice. Hubble Protocol does not endorse the tokens or platforms mentioned in this article.
Key Takeaways
- Hubble Protocol accepts Kamino Finance kTokens as collateral.
- Users can leverage their Kamino positions by borrowing USDH.
- This integration has helped increase USDH liquidity on Orca.
Hubble Protocol has begun accepting Kamino Finance's kTokens as collateral for borrowing USDH. The protocol is proud to announce this addition to the composability of Solana's decentralized finance (DeFi) ecosystem and USDH.
Integrating kTokens on Hubble also provides additional utility for users who want to leverage their opportunities to earn real yield on Kamino. Hubble and Kamino are taking the ability to supercharge liquidity to the next level.
This article will highlight the utility of borrowing Hubble's USDH against Kamino's kTokens. Then, it will explain how users can deposit liquidity on Kamino and borrow USDH against the value of their Kamino position on Hubble.
Do More DeFi with Hubble Protocol and Kamino Finance
For many users providing concentrated liquidity, their DeFi adventure becomes a life of constant rebalancing, calculating, and dodging divergence loss. Providing concentrated liquidity directly on decentralized exchange (DEX) is not the easiest task in DeFi.
When providing liquidity on a concentrated liquidity market maker (CLMM), users receive a non-fungible token (NFT) as their deposit receipt. This token is a unique 1/1 NFT that is nearly impossible to price, so once this NFT is received, one's adventures in DeFi composability immediately end.
Kamino slashes through this Gordian knot of troubles by automating concentrated liquidity positions and providing users with kTokens instead of an NFT.
The protocol uses advanced market-making strategies to automate and optimize users' positions, and the fungibility of kTokens allows users to optimize their liquidity through borrowing.
Kamino provides an easy-to-use interface for earning yield from concentrated liquidity, and Hubble provides the means for borrowing through USDH. The composability of the two protocols creates a recipe for innovative liquidity solutions on Solana, so users can do more with their participation in DeFi.
Leveraged Liquidity Made Possible with USDH
One significant possibility that emerges from the composability of Kamino's kTokens and Hubble's USDH is the ability to leverage liquidity positions as a liquidity provider.
The first kToken accepted as collateral for borrowing USDH is kUSDH-USDC (Orca). With a maximum loan-to-value (LTV) ratio of 97.08% and a 0.25% minting fee, users can borrow USDH to leverage their positions on Kamino.
Here's how users can leverage their Kamino positions with USDH and kTokens:
- Step 1: Mint USDH on Hubble.
- Step 2: Deposit USDH on Kamino's USDH-USDC vault
- Step 3: Deposit kUSDH-USDC on Hubble.
- Step 4: Mint USDH up to 97% LTV.
- Step 5: Provide additional USDH liquidity on Kamino.
Repeating these steps allows users to acquire up to 20x leverage on their USDH-USDC liquidity position on Kamino.
How Hubble is Providing Solana's DeFi Community with Liquidity Solutions
Over $40 million worth of USDH has been minted since Hubble first launched. During that same time, USDH's total trade volume surpassed $750 million.
In addition, a recent study from Step Data Insights shows that USDH has become the most commonly paired Solana-native stablecoin on Solana's growing DEX landscape.
These statistics show that USDH is currently Solana's most widely used decentralized stablecoin for DeFi. In addition, USDH has attained deep liquidity with Kamino and kTokens.
For example, on Hubble's first day after integrating kTokens, Orca's USDH-USDC concentrated liquidity pool became the third most liquid pool as measured by total deposits.
Achieving deep liquidity for USDH is critical for the stablecoin's use cases in DeFi. The health of a stablecoin's peg depends heavily on the token's liquidity in the market, so deep liquidity is one of the most important moats Hubble can foster for the sustainability of USDH.
Hubble Builds the Future of Liquidity Solutions on Solana with Kamino
The list of assets that can be used to borrow USDH has grown longer as the DeFi community on Solana continues to strengthen. The addition of Kamino's kTokens is an especially significant addition to the collateral whitelisted for USDH.
Hubble and Kamino provide two very different liquidity solutions for the Solana DeFi community. Hubble allows users to access the value of their tokens and increase their liquidity by borrowing USDH, and Kamino enables users to provide liquidity on CLMMs.
Each project has a different mission and use case for DeFi. However, the synergy of these two protocols creates new possibilities for users to access liquidity on Solana. It will be exciting to see what happens as Hubble and Kamino continue leveraging the power of composability in the future.
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