Hubble Report: One Week Live!

After one week, Hubble Protocol’s total value locked (TVL) is nearing the $40 million mark, and over $25 million worth of tokens deposited as collateral. Around 13.5 million USDH has been borrowed, and a little over 90% of the USDH currently minted is deposited in the Stability Pool.

Hubble Report: One Week Live!
A report detailing activity on Hubble Protocol during its first week.

Hubble Protocol launched on January 31, 2022. Since then, one week later, hundreds of users have been interacting with Hubble’s smart contracts to mint USDH, participate in the Stability Pool, and stake HBB.

A snapshot of the Stats page at the time of writing reveals just a portion of how well the protocol is fairing at the end of its first week.

The Stats page from Hubble Protocol captured on February 8, 2022.

As we can see, Hubble Protocol’s total value locked (TVL) is flirting with the $40 million mark, and over $25 million worth of tokens have been deposited as collateral. Around 13.5 million USDH have been borrowed, and a little over 90% of the the USDH currently minted is deposited in the Stability Pool (more on this later).

Collateral Deposits

By exploring the addresses for each token’s collateral vault, which can be found in Hubble’s docs, the breakdown of the tokens deposited are as follows. Clicking the link for each token will navigate to the page displaying the most current information about deposits:

  • mSOL: 69,398.789042581
  • SOL: 52,525.211838341
  • RAY: 6,121.263355
  • SRM: 5,357.365089
  • FTT: 3,000.974334
  • ETH: 371.92528094
  • BTC: 214.105061

As of Hubble’s first week, Marinade Finance’s mSOL is the most deposited token on Hubble Protocol, with SOL coming in second. mSOL is a yield bearing token that increases in value according to the yield generated by rewards from Solana’s Proof of Stake (PoS) consensus mechanism.

In the near future, users can opt into having their SOL deposits also earn yield on Hubble through Marinade liquid staking contracts. Additionally, other tokens can be opted into strategies for earning yield while deposited on Hubble.

Forthcoming expansions to the Stats page will include similar breakdowns of deposited tokens (with easy to understand visuals) as well as other information of interest.

Healthy Loans Overall

Moving to the Liquidate page, more information about the size of deposits and extent of borrowing can be found.

The Liquidate page from Hubble Protocol captured on February 8, 2022.

There are currently 485 open positions that account for the total amounts of deposited collateral and borrowed USDH. Roughly 35% of these positions have deposits of less than $1,000 worth of collateral. Around 61% have deposits less than $5,000, and only around 10% of deposits are above the $100,000 mark.  

As for liquidation risk, around 2% of accounts are within 10% of their liquidation point of 90.9% loan-to-value (LTV), and 18% of accounts are susceptible to liquidation during Recovery Mode* (when system LTV rises above 66.6%/falls below 150% collateral ratio). Around 43% of accounts are below 50% LTV, a healthy collateral ratio of 200%.    (*Recovery Mode has been removed)

Due to the fact that a large number of positions have maintained a healthy LTV, there have been very few liquidations over one week. Around $4,300 in liquidation rewards have been distributed to users participating in the Stability Pool since Hubble’s launch.

USDH Deposits

It’s no secret that Hubble drew a lot of inspiration from Liquity, a collateralized debt position (CDP) project on Ethereum.

One of the major innovations Hubble has adapted from Liquity is the Stability Pool, which helps democratize liquidations and reduce the necessity for using bots that can clog the network.

Comparing metrics from Hubble and Liquity’s early days, we can see a similarity in how much of each project’s stablecoins end up in the Stability Pool.

Currently, around 90% of all USDH minted has been deposited in Hubble’s Stability Pool, and this was the case for Liquity, as well, during its first days after launch.

After one week, 80% of LUSD was deposited in Liquity’s Stability Pool.

Snipped from: https://dune.xyz/dani/Liquity

However, just a few days later, around 93% of all LUSD made its way to the Stability Pool.

Snipped from: https://dune.xyz/dani/Liquity

One explanation for this phenomenon is the high APR for rewards offered in each project’s native token. Currently, Hubble’s rewards APR for HBB is around 50%. Around the same number of days after launch, the APR for LQTY rewards was at a much higher 177.34%.

Snipped from: https://dune.xyz/dani/Liquity

At the time when Liquity also witnessed around 90% of its stablecoin deposited in its Stability Pool, the APR for rewards were more in line with what Hubble is seeing today.

Snipped from: https://dune.xyz/dani/Liquity

Through partnerships with Saber and Mercurial, Hubble has added to the rewards for providing liquidity on these decentralized exchanges (DEXs).

This incentive should help increase the number of users who deposit USDH on these DEXs instead of the Stability Pool, and this should make swapping USDH more capital efficient.

Saber has opened pools for USDH-USDC (270,864.6 USDH deposited) and USDH-CASH (233,817.9 USDH deposited). Mercurial has opened a USDH-3Pool with 729,249.93 USDH deposited along with USDC (1,342,514.8) and USDT (1,322,997.5).

Staked HBB

Around 750,00 HBB tokens are currently staked on Hubble Protocol. This has delivered over $70,000 in USDH rewards to users who stake HBB. The APR for these rewards currently stands at 233.45%.

Snip from the Stake page of Hubble Protocol captured February 8, 2022

Anecdotal evidence shows that users are staking the HBB they receive from Stability Pool rewards in order to increase their staking rewards of USDH, and this USDH is then deposited into the Stability pool to earn more HBB.

Recent comment from Hubble Protocol's Discord community.

Automating the process described in this message could become a feature implemented in the future. Hubble will continue to improve user experience as the protocol develops, and a revised roadmap has been announced for release during Hubble’s second week after launch.

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