> For the complete documentation index, see [llms.txt](https://docs.hubbleprotocol.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hubbleprotocol.io/faq/risks.md).

# Risks

There are inherent risks associated with participating in DeFi. Some of these risks include but are not limited to: 

**Smart Contract Risk:** Hubble operates on lines of code known as a smart contract. If a hacker can find a way to exploit a smart contract, they can steal funds. 

Hubble mitigates the risk of an exploit by regularly engaging with third-party security firms that [audit](/faq/security/security-audits.md#security-audits) our smart contracts. Hubble has also launched a [bug bounty](/faq/security/security-audits.md#bug-bounty-program) program to reward whitehat hackers for reporting any issues. 

**De-pegging Events:** Stablecoin prices fluctuate naturally with market movements, usually within a very narrow range above or below $1.000. Major events can cause the price of a stablecoin to move beyond this narrow range making USDH worth less than $1. 

Hubble mitigates the risk of de-pegging events in several ways. USDH is backed by at least $1.20 in crypto assets at all times, and USDH is always worth $1 on Hubble. In the event USDH de-pegs, users can repay their loans and retrieve their collateral.

If USDH falls below $1 on the market, users can cheaply repay their loans to retrieve their collateral. Conversely, if USDH rises above $1, users can mint more USDH with their collateral in order to capture a profit. Both of these actions help bring USDH back to $1.

Additionally, Hubble has developed mechanisms such as the [Peg Stability Module (PSM)](broken://pages/4j13XGBFUjres07o0yiz#peg-stability-module) and the [Stability Fee](broken://pages/QGN7YAPPYVyeu6JrsXDc#stability-fee) to further defend USDH's peg. 

 


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.hubbleprotocol.io/faq/risks.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.