# USDH Peg Stability

### **How can USDH fall below peg?**

The demand for USDH dictates its price. When many users or one large transaction swaps out of USDH for other tokens, this puts downward pressure on USDH's price, and it can dip below $1.

Here’s a comprehensive explanation in our [USDH doc](https://hubble-markets.gitbook.io/hubble-protocol-official-docs/about-hubble/usdh).

### **How can USDH climb above peg?**

Demand dictates price. When USDH is heavily bought on the market (demand increases) the price of USDH can climb above $1. 

### How does USDH maintain its peg?

1. **Peg Stability Module**\
   The Peg Stability Module is Hubble's primary pegging mechanism, allowing zero-slippage swaps between USDH and USDC to allow frictionless arbitrage.<br>
2. **Stability Fees**\
   Hubble has a Stability Fee, acting as an interest rate, that can be increased if USDH falls below peg. The Stability Fee incentivizes users to repay their loans, which can help reduce USDH supply on the market when necessary.<br>
3. **Hubble Native Yield**\
   USDH Vault stakers earn a an adjustable % yield referred to as the Hubble Native Yield (HNY). The HNY can be manually adjusted to increase or decrease rewards, thus increasing or decreasing USDH demand.

### Has USDH ever de-pegged?

USDH has never experienced a serious de-pegging event. During the earliest days of the protocol, when there was little USDH liquidity, the trading price of USDH was above peg by a few cents at one point. USDH has since held a tight peg, and it remained pegged during two turbulent market periods: between April and June 2022 then November 2022.


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