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Market volatility is a common feature of cryptocurrencies. This means that coin prices can fluctuate abruptly, making it difficult for investors to decide which coin to invest in. However, Stablecoins eliminate this problem. With Stablecoins, there is a way to bridge the gap between fiat currencies and cryptocurrencies because they play a similar role to fiat but maintain cryptocurrency’s mobility and utility. As a blockchain-based currency, stablecoin holders have access to numerous advantages. The idea behind developing these cryptocurrencies was partly to avoid the volatility experienced by traditional cryptocurrencies such as Bitcoin. This is because rapid changes in market value limit their use as a payment method.
There have been a number of Stablecoins issued on blockchain networks that support smart contracts and are widely used throughout the DeFi community and on exchanges. In a similar vein, USDH is a Hubble-issued Stablecoin pegged to the US dollar, which is less volatile. The USDH token is backed by a range of crypto assets, including SOL, mSOL, BTC, ETH, RAY, SRM, FTT, etc. The USDH is more comparable to traditional currencies than other cryptocurrencies. Due to its stability, USDH is easier to trade economically. In this article, we will explain in detail why USDH will be the next big thing in the cryptocurrency world.
Why USDH is the next big thing
Stablecoin adoption will play an important role in popularising cryptocurrency and mainstream use of cryptocurrencies in everyday transactions and for other purposes as well. For example, they may be used to trade goods and services over the blockchain. Furthermore, they can be employed in decentralised insurance solutions, derivatives contracts, and consumer loan applications. The transactions cannot occur if the transacting currency remains volatile, which carries the inherent risk of one party losing monetary value due to price fluctuations.
The USDH token is one of the native SPL tokens in Solana, which can be used for anything Stablecoins can be used for. You can use it to pair with AMMs for liquidity, bond for tokens, or hold it as a store of value. USDH is pegged to USD, meaning that each USDH is equal to $1, making it a cryptocurrency that can be used without the risk of volatility. USDH is backed up with crypto assets that are censorship-resistant. Other Stablecoins have points of failure, such as being backed by fiat in some way. Moreover, USDH’s value is ensured by vetting the cryptocurrency assets used as collateral.
Additionally, by minting USDH, you can earn a yield on your deposited assets and reward points for your deposits in the Stability Pool. Given that USDH is not fiat-backed, regulatory risks are unlikely to influence its viability.
What makes USDH different from traditional cryptocurrencies?
Bitcoin and all cryptocurrencies are based on blockchain technology, ensuring the secure ownership of digital assets. For security reasons, cryptocurrencies circulate on decentralised networks that are protected by cryptography. Almost all cryptocurrencies have a value determined by what the market will bear, and many people who buy them expect their value will increase. A good example is Ethereum, which is a volatile cryptocurrency.
Stablecoins, cryptocurrencies with less volatility, may be advantageous in situations like these. Unlike traditional cryptocurrencies, Stablecoins are specifically designed to keep their price constant.
As you trade in the DeFi ecosystem, you will encounter stablecoins such as USDH. USDH is designed to maintain its value over the long term. A basket of cryptocurrencies backs USDH, so you can take advantage of the stability. You can use USDH to earn yield in DeFi while you hold onto your tokens like BTC, ETH, and SOL, which could appreciate in value.
Benefits of USDH
Compared to fiat-backed stablecoins and algorithmic stablecoins, USDH has several advantages. USDH is not issued from a central authority like fiat-backed stablecoins, so it cannot be “shut off” at the push of a button. The stability of censorship-resistant backing through bluechip crypto assets also ensures USDH maintains value unlike algorithmic stables, which can enter a “death spiral.”
Users can gain leverage while holding
Users on Hubble can deposit tokens that they want to keep for a long time, ones they think will have a greater value in the future. In the meantime, they can borrow USDH tokens to leverage their position, buy more of the same tokens, or participate in DeFi. When users want to retrieve their tokens, all they need to do is repay their USDH balance.
Less volatile
USDH solves one of the major problems with mainstream cryptocurrencies: their drastic fluctuations, which make them difficult, if not impossible, for financial purposes. DeFi is giving people opportunities to earn stable yields from stablecoins, and USDH is a great option for earning these yields, since it carries less risks that fiat-backed or algorithmic stablecoins.
Provides multiple collateral options
It is possible to provide collateral using SOL, ETH, BTC, FTT, RAY, SRM, and mSOL. Borrowers are free to combine these tokens as collateral. Furthermore, Hubble plans on accepting a wider range of tokens in the future, including yield bearing assets such as LP tokens. A coming feature will allow users to earn yield on their deposits as they borrow.
Borrowing fee one-time only
If you borrow USDH, you will pay a capital-efficient rate no higher than 2-3% APR. In other words, if you put your USDH to work in a liquidity pool, lending protocol, or yield farm, then you can earn a yield much higher than this fee. A small amount of USDH may have to be acquired from the market to repay your loan plus fees.
Rewarding liquidation
In exchange for USDH provided to the Stability Pool, users may receive liquidation rewards in collateral assets. As soon as a liquidation occurs, the vast majority of liquidated assets are distributed between users who deposit in the Stability Pool. This democratizes liquidations unlike nearly every other lending protocol where whales benefit.
USDH adoption is on the rise
USDH can be used on multiple platforms on Solana. It can be traded on Mercurial, Saber, or Crema. USDH can also be lent or borrowed on Solend. Users who deposit USDH on these DeFi protocols earn the associated fees for providing USDH as liquidity.
How will USDH tokens change the game in the future?
The use cases and applications of cryptography are maturing, expanding, and developing in unimaginable ways from just a few years ago. Many big players, including Visa, have recently launched pilot programmes using Stablecoins. These coins promise a bright future for crypto implementation, and they certainly look promising. USDH can be an investment that ensures investors stay ahead of others since Hubble strives to make it the best. Investors can trade USDH easily with Bitcoin and Ethereum, two of the most volatile assets. In addition, crypto investors have the opportunity to hold a stable asset, one that is similar to cash in value, to sit on the sidelines and watch the market.
USDH’s future looks promising as Hubble’s stablecoin on the Solana blockchain. The team at Hubble is actively working on many aspects simultaneously to strengthen the coin. Soon, they’ll add new assets as collateral. Investors in the future will have the opportunity to earn higher yields on collateral. Additionally, they will offer yield bearing vaults and structured products to further increase the utility of USDH token for its users.
Hubble will also focus on partnerships and integrations, efficient governance, and community engagement. In the future, they will adopt a community-supported governance model, similar to other DAOs. The democratisation of the platform allows users to suggest new products and improvements. They will also be able to comment and vote on protocol changes and delegate implementation of key functions to the core team.
USDH is pegged to the dollar to maintain its stability, and it can be traded with several other tokens or stored in a wallet. USDH provides stability that most cryptocurrencies do not, making them usable as real currency.
Moreover, Hubble’s USDH coin also provides a platform for taking loans and earning yield on another platform. You don’t simply lose your deposited collateral assets when you deposit them with Hubble. As a result, borrowers will be able to earn a yield on their deposited assets. Holding USDH allows investors to enjoy crypto assets without worrying about losing their value.
Conclusion
With USDH token, you get the best of both worlds: an anonymous payment mechanism like a cryptocurrency and stable value like a fiat currency. When you borrow Stablecoins on other collateral debt position (CDP) platforms, you lose the ability to earn a yield on your tokens. As long as your tokens are held in Hubble’s borrowing contract, you can put them to work and generate yield while still holding your tokens. Hubble is constantly working to improve user experience with USDH token. As a digital cash option, Stablecoins make sense. However, investors should always do their due diligence before investing in cryptocurrencies. The stable nature of a cryptocurrency does not mean that it is not a cryptocurrency. As a result, it is still newer and may carry some risks that are not discovered yet.
Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day! Live from the Platinum Crypto Trading Floor.
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