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FAQ
Fee Rates
How Hubble determines the one-time fee for borrowing.
There are two times when users experience fees:
Borrowing Fee
- at the time of borrowing USDH
At borrowing time, the fee is calculated based on the borrowed amount and is added on top of a user's debt. For example, if a user borrows 100 USDH and the fee rate is 0.5%, then the following occurs:
- Hubble mints 100 USDH into the borrower's wallet
- Hubble mints 0.5 USDH into the HBB Stakers' pool
- The borrower's Hubble account records a debt of 100.5.
Stability Fee
Hubble's Stability Fee serves two purposes:
- Support USDH's peg
- Create revenue for USDH stakers
When USDH falls below its peg, the Stability Fee is raised to incentivize user-initiated repayments of USDH loans. When users introduce too much USDH to the market, USDH's price can fall below parity with 1 USD.
By raising the Stability Fee, borrowing USDH becomes more expensive and makes repaying USDH loans a more cost-efficient option. As users acquire USDH from the market to repay their loans, the market supply of USDH contracts and raises prices back to $1.
A portion of the collected Stability Fee is rewarded to users who stake USDH in the USDH Vault, creating a Hubble-native savings rate for USDH.
Last modified 22d ago
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