Hubble Protocol has begun accepting Kamino Finance's kTokens as collateral for borrowing USDH. We're proud to announce this major win for the composability of Solana's decentralized finance (DeFi) ecosystem and USDH.
Integrating kTokens on Hubble is also a huge win 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 benefits of borrowing Hubble's USDH against Kamino's kTokens. Then, it will explain how users can easily deposit liquidity on Kamino and borrow USDH against the value of their deposits on Hubble.
Do More DeFi with Hubble Protocol and Kamino Finance
For many LPs providing concentrated liquidity, their DeFi adventure becomes a life of constant rebalancing, calculating, and dodging divergence loss. Unfortunately, providing concentrated liquidity directly on decentralized exchange (DEX) is not the easiest task in DeFi.
When providing liquidity to 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 maximize their liquidity through leverage.
Kamino provides an easy-to-use interface for earning yield from concentrated liquidity, and Hubble provides the means for leverage through USDH. The composability of the two protocols creates a recipe for unparalleled 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 an LP.
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 just a 0.25% minting fee, there is serious room for leveraging USDH positions on Kamino.
Here's how users can leverage their Kamino positions with USDH with 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 20x leverage on their USDH-USDC liquidity position on Kamino. Accordingly, USDH should see a huge boost in liquidity as users take advantage of this opportunity.
How Hubble is Becoming Solana's Premier Liquidity Solution
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 becoming Solana's most trusted native stablecoin for DeFi. In addition, Hubble is helping build trust in USDH by creating deep liquidity for USDH with Kamino.
For example, on Hubble's first day after integrating kTokens, USDH-USDC became the third most liquid pairing on Orca's Whirlpools.
Deep liquidity for USDH is critical for expanding 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 must create for the sustainable growth of USDH.
Hubble Builds the Future of Liquidity Solutions on Solana with Kamino
The list of assets that can be used to borrow USDH grows 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 easily.
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 greater liquidity on Solana. It will be exciting to see what happens as Hubble and Kamino continue leveraging the power of composability in the future.