USDH Vault

What is the USDH Vault?

The USDH Vault (formerly Stability Pool) ensures that loans can always be repaid and that the system remains healthy. USDH is designed to be backed by collateral at all times, and the USDH Vault helps guarantee this backing.
Users can provide USDH to the USDH Vault to earn liquidation rewards received in collateral assets. When a liquidation is triggered, USDH is burned to cover a liquidated user's debt, and forfeited collateral is distributed to USDH Vault providers.
As USDH Vault providers' USDH deposits decrease, their liquidation rewards increase. The tokens earned as liquidation rewards should be ~10% more valuable than the amount of USDH burned at the time a liquidation is triggered.
USDH Vault providers are also rewarded HBB, Hubble’s native token, which can be staked to earn USDH rewards.

How is the USDH Vault APY calculated?

The USDH Vault APY is currently calculated by the HBB emissions that users receive when providing USDH. In addition to this APY, users also receive crypto assets at a discount when they have USDH staked.
This means that a USDH Vault provider's USDH balance will decrease if a liquidation occurs, but their balance in crypto will increase. When a liquidation occurs, USDH Vault providers earn a net gain of 1.1x in addition to the HBB yield received when depositing USDH.

What are liquidations?

Liquidations occur when an open position reaches an LTV of 80%. This means a user doesn't have enough collateral to support their borrowing.
Liquidations occur when the crypto market goes down in value. You can deposit $1,000 worth of SOL on Monday, and on Wednesday that value can be $800. If the value of your deposit gets too low and you do not pay back USDH, your deposit will be forfeited.
A position at or above 80% LTV can be liquidated via a liquidation bot.
Head to the Liquidations section for more info.

How are liquidation rewards allocated to the USDH Vault?

Liquidation rewards are awarded proportionally to your % contribution to the pool. If your contribution constitutes 1% of the USDH Vault, you will receive 1% of all liquidation rewards.

Do USDH Vault providers make net gains from liquidations?

Yes. If a liquidation occurs, a USDH Vault provider's USDH balance will decrease, but the net value of their account will increase. For every 1 USDH paid, USDH Vault contributors receive $1.1 worth of collateral. Essentially, contributors receive other users' collateral assets at a 10% discount. Here’s an overview of our USDH Vault.

Is there a minimum or maximum contribution to the USDH Vault?

No. USDH Vault providers can deposit any amount of USDH.

How do I get USDH to contribute to the USDH Vault?

USDH can be borrowed on Hubble against collateral assets via the Borrowing tab. USDH can also be swapped for on platforms like Mercurial, Jupiter, and Saber.

Does my USDH Vault deposit get locked in?

No. At the moment you can deposit and withdraw USDH from the USDH Vault at any time. There is no lock-in period.

What happens with liquidations when the USDH Vault is empty?

When the vault is empty, liquidations are redistributed amongst all debt holders. This means that both the collateral assets and the USDH debt of the liquidated position are distributed amongst current borrowers.
A full explanation of Redistribution is available here.