🇬🇧
Hubble Protocol - Official Documentation
Use Hubble ProtocolJoin the DiscordTwitterBlog
  • Overview
  • Why Use Hubble?
  • FAQ
    • General
    • USDH Stablecoin
      • Acquire USDH
      • Use USDH
    • Borrowing
      • Borrowing Fees
      • Collateral
      • Collateral Yield
      • Loan Auto-close
    • Stability Vault
      • Stability Vault Liquidations
      • Stability Vault Model Liquidation
      • Hubble Native Yield
    • USDH Peg Stability
      • Peg Stability Module
      • Stability Fees
    • Liquidations
      • Hybrid Liquidation Model
      • Liquidation Example
      • Redistribution
    • Security
      • Security Practices
      • Security Audits
      • Bug Bounty Program
    • Risks
    • Governance
    • Mobile App
    • Hubble SDK
    • More About Hubble
  • Resources
    • Litepaper
    • Technical Resources
    • Community Resources
Powered by GitBook
On this page
  1. FAQ

Risks

Possible risks users may face when using Hubble

PreviousBug Bounty ProgramNextGovernance

Last updated 2 years ago

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 our smart contracts. Hubble has also launched a 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) and the Stability Fee to further defend USDH's peg.

audit
bug bounty