KuCoin AMA With Hubble Protocol (HBB) — Supercharging Liquidity on Solana
Dear KuCoin Users,
Time: February 14, 2022, 12:00-12:48 (UTC)
Hubble Protocol is a financial platform building sustainable DeFi services on Solana. Hubble’s core service centers around a zero-interest loan mechanism. For a one-time, 0.5% fee, Hubble’s US dollar-pegged stablecoin, USDH, can be borrowed against a basket of seven assets, including ETH, BTC, and SOL. The groundwork for Hubble was laid during the Solana Hackathon in 2021, during which our founder, Marius Ciubotariu, discovered the potential that the parallel capacities of Solana and Rust have for lending and yield protocols. Phase two of the project will introduce structured products, whereby collateralized assets will earn continuous yields with Hubble’s Yield-Mechanism. In phase two, Hubble will lay the foundation for a comprehensive Yield Protocol across the Solana blockchain. Phase three of the project will entail undercollateralized lending. Hubble’s vision is to collaborate with innovators on Solana and beyond to promote the democratization of finance and to educate financial users on the rapidly evolving world of DeFi.
Official Website: https://hubbleprotocol.io
Marius Ciubotariu — Founder of Hubble Protocol
Marius Ciubotariu came into DeFi with almost a decade of experience in traditional finance. Having started his career as a freelance developer, Marius began work at Morgan Stanley in 2013. Thereafter, in 2014, Marius went on to work at Bloomberg LP as a Fixed Income and Derivatives specialist, eventually becoming a Senior Software Engineer in 2016. In 2021, Marius participated in the Solana hackathon, where he was introduced to the Liquity whitepaper, a paper that he found both fascinating and elegant. However, Marius believed that Solana and the Rust language held the even greater potential for a lending protocol, where a greater variety of assets could be accepted, and a more extensive yield protocol could be implemented at the same time. Thus, Marius, in combination with Thomas Short, spent months gathering funding and putting together a team, and by January 2022, Hubble Protocol went live.
Q&A from KuCoin
Q: First of all, tell us about your background. How did you get to the point where you’re Hubble’s project lead? How did you get into programming and also finance?
Marius: I’m a software engineer with a background in fintech. Prior to going full time in crypto, I was working on an exotic derivatives pricing engine doing C++ and OCaml.
I first started coding when I started high school. In Romania, they teach you C++ in school. I loved it. I was spending a lot of time after school coding and building websites in php(!) but eventually went to do an economics university degree because I thought I was already an amazing coder (the hubris!) and wanted to learn something else. That eventually led me to join Bloomberg and learn about financial derivatives and become passionate about the maths behind it.
Hubble started as a hackathon project in May 2021, a time when there was only one single Solana tutorial online and “only” $300M circulating on the Solana blockchain. I dove into Solana with the goal of satisfying my thirst to write some Rust, getting my hands dirty with smart contracts, and learning about how DeFi really works behind the hype. I went right in with a curious mind and found plenty to quench my thirst. The learning curve was super steep, but I managed to talk to a lot of smart and experienced engineers and went down the rabbit hole to learn about blockchain scalability, composability, etc., and it became immediately obvious that Solana would be one of the great chains of the future.
During the hackathon, I was thinking that we have the chance to build a new financial ecosystem from scratch, one that wouldn’t be plagued by scalability problems. I also thought that Rust would be a kind of barrier that would filter for great engineers (see Paul Graham’s “Beating the Averages”), and that, with my knowledge, I felt somewhat responsible for building a solid financial instrument (primitive) for the ecosystem.
Given my background and the opportunity, it made sense to assemble a team and start building. 7 months later, we launched the mainnet, the team has grown to about 15 people, and we’re still growing and building.
Q: How do you see people interacting with Hubble? Why would someone want to use your DeFi protocol? Why use Hubble instead of another service? Can you take us step by step through what users might do when they’re on Hubble?
Marius: I think people will come to Hubble in search of a solution to their needs. Right now, the users in search of extra liquidity can borrow USDH, which is the first service Hubble has launched, and we’ll continue shipping new services as the DeFi landscape evolves.
Let's say you have SOL, BTC, ETH and want to keep them long-term but need some cash to spend on some other coins and don't want to sell these long-term holdings. You can come to Hubble, deposit them, and borrow USDH at a one-time fixed cost.
You will get USDH, which you can then exchange for other coins in the Solana ecosystem and buy other things like NFTs or new IDO tokens.
When you come back and repay your USDH, you will have full access to your original deposits.
That basically makes you "long" on your tokens.
Hubble offers a once-off borrowing rate at the moment. After a month or so, it's cheaper to borrow from Hubble than from other lending protocols.
Equally, Hubble will allow you to keep earning yield on your deposits such that the loan keeps getting better and eventually repays itself.
In the future, we will add all sorts of yield strategies that your deposits can participate in. Essentially, this will allow you to select your own yield strategy to choose how you grow in value and repay itself.
Q: Your project is responsible for two tokens: HBB and USDH. What’s the purpose of these tokens, and how do they fit into the overall DeFi ecosystem?
Marius: USDH is the token you can borrow when depositing collateral. When you repay your collateral in USDH, you gain full access to your collateral.
USDH is called a stablecoin, but there are many types of stablecoins, and you could easily confuse them. It's not the same as USDC or USDT or UST. These are also stablecoins, but they serve different purposes. Our USDH stablecoin, in particular, is capital efficient for borrowing and leverage but not capital efficient for payments.
USDH is a stablecoin that gives you exposure to your assets, whereas, for those other stablecoins, you would have to sell your assets.
USDH trades on stablecoin exchanges like Saber or Mercurial, and it should trade at a rate of 1:1 with other stablecoins. Otherwise, it would be arbitraged away.
HBB is the utility token of the protocol. It is used to reward users that act in line with the protocol's goals.
If you deposit USDH to help with liquidations, you get HBB, if you provide LP, you get HBB, and if you lock your HBB, you can earn rewards based on borrowing fees.
HBB will serve other purposes such as:
(1) giving better minting fees to large locked holders
(3) NFTs for boosted rewards and exclusive memberships in our Discord channel
The thing to remember is that HBB is not "just another governance token". If you act according to the designed mechanisms of the protocol, you can earn rewards, and the only mechanism is to lock your HBB or stake it where it needs to be staked.
Q: Hubble accepts seven different assets for collateral, but there are thousands of tokens on the crypto market. Will Hubble expand the number of assets it accepts for collateral? If so, what kinds of assets will Hubble accept?
It depends on what the users need to borrow against. For that, we are analyzing the chain data, talking to people, and finding out what they want to hold long-term, or what they want to leverage up. We do market research to ensure we make decisions that benefit participants in the long run. There are quite a few borrowing protocols allowing you to borrow against SOL. Do we need another one, or can we compete there? That’s the thinking we’re employing for these sorts of questions.
In the medium-term, we will be adding collaterals that allow users to actually earn an extra yield on them. We have something special we're cooking, but eventually, you will be able to deposit some of your tokens and choose the yield strategy you want to delegate your capital to in order to make money.
Currently, on the roadmap, there are a few concrete examples:
(1) UST and UST derivatives (like aUST)
(2) Some LPs
(3) More staple coins that people want to hold long-term like LUNA, AVAX, BNB, and some Solana blue-chip tokens
Q: The DeFi space is rapidly evolving. Your docs say Hubble is a long-term project. How is Hubble a long-term project in this constantly changing environment? What steps will Hubble take to remain relevant for users? What do you see for Hubble’s future?
Marius: I believe DeFi is and will continue to be hyper-competitive. Open source, lower barriers of entry, and plenty of VC money all give everyone the chance to try their hand and build something. That’s awesome for the users but difficult for the founders.
Given that premise, I believe that now, what will distinguish a protocol coming in for a quick buck versus one that is here for the long term is the approach to team and community building, and by the team, I mean both developers and marketers.
There are tens of announcements of startups raising money daily, so it’s very easy to find ideas, but can you execute well, have a good time-to-market, and build a community around your idea? Can you stay competitive after the first mainnet version launch? Will you be able to pivot and find a product-market fit? That’s the next difficult part after the initial coding period.
We are focusing intensely on building a team (devs and marketing) and finding product-market fit, refining our offering, having an ambitious roadmap, and speaking to our investors for insights and partnerships.
Q: The United States is talking a lot about regulating crypto, DeFi, and stablecoins. What do you think about when you see the US Congress talking about stablecoins on a regular basis?
Marius: I’m not very concerned. It’s a positive development, but I think a lot of the discussions are misguided. Not everything that trades at $1 is the same, not all stablecoins are the same. In fact, our stablecoin is a derivative and a synthetic asset artificially kept at peg through some mechanisms. USDH is backed by crypto, and it’s a synthetic derivative product, overcollateralized and kept at peg due to arbitrage. It’s suited for borrowing and leverage, not for payments.
It’s not the same as a stablecoin backed by dollars. The problem with the stablecoins backed by real dollars (USDC, USDT) is that it looks like there is $1M sitting in a bank account doing nothing. Still, in fact, they are mirrored on the chain and circulating freely, allowing anyone to do anything with them (almost, given their centralized censorship risks). So that’s a problem for the regulators because those dollars are completely untransparent.
With Hubble, there are no real dollars backing USDH. USDH is not even a stablecoin like USDC; it’s a different beast, but both trade at 1:1; that’s literally the only resemblance. But that doesn’t make them the same kind of asset.
I don’t think “stablecoin regulation” will impact USDH, but DeFi specific regulation, potentially.
Q: What advice would you give to someone who wants to get into DeFi today? What advice would you give them about using Hubble?
Marius: Yes, the first thing to know is that crypto can be all-consuming and hard to penetrate initially. A lot of patience and skepticism is highly recommended. Please educate yourself seriously and don't trade a lot until you feel you understand.
Secondly, regarding trading and prices - daily market fluctuations are not fundamentals driven. Short term, the market is very much driven by speculation, frenzy, hype, and less by fundamentals. There is a lot of inside information and trading. As such, you should know you’re playing a game against very capital-heavy participants with a big information advantage.
If you think you found a gem token, make sure it’s not a scam first, and do your due diligence on the team and product. If your horizon is longer-term, your goal is to find products that will keep growing and are somewhat undervalued compared to their future valuations, or products that directly generate revenues (similar to dividends in capital markets).
One way to do it long-term is to search for the products that have been battle-tested, projects that are transparent and generate revenue. This way, you might be saved from being scammed, but it doesn’t mean you’re buying it cheaply or that it’s undervalued.
Education is key, essentially, but so is speaking with people. Crypto people are super passionate about sharing their knowledge. Just tap into that. There are so many podcasts, newsletters, blogs, interviews, and groups. By the way, this is NFA.
Come to our Discord, ask us what Hubble does and how it can help your particular needs, then make an informed decision.
Q: Tell us two things you really love about Hubble and also one thing you’d really like to improve.
Marius: I love:
(1) Team and community - a lot of smart and nice people
(2) That we are live on mainnet and actually providing utility to some kinds of market players (apart from simple token price action)
I would like to improve our communication with the community. We've all been pretty stretched out with the release, but I think we will be able to have more time soon to have more two-way dialogues with people in the community and people who are Hubble-curious.
Free-Ask from KuCoin Community
Q: Many projects have problems with UI/UX, and this one turns off new users. How do you plan to improve the interaction with new users and users outside the crypto space?
Marius: We’re working intensely to improve the UI/UX. We have a new design coming up shortly, making it mobile-friendly, and adding tutorials and wizards. We'll keep building until anyone can understand.
Q: Where can I buy your tokens right now? What is your current contract, and how can I buy them?
Q: How old is your project? What are the major plans ahead? Could you show us an image of your roadmap?
Marius: Roadmap will be published this week, but essentially it includes:
(1) More tokens as collateral
(2) Yield strategies on the tokens
(3) Structured products (more of a separate project)
Q: How many team members do you have? Do they have enough experience in the blockchain field? Do they have any experience working in crypto and non-crypto projects?
Marius: We have about 8 full-time devs and 5 full-time marketing, and growing. Plenty of crypto and non-crypto experience, a lot of finance and tech experience.
Q: Did you consider community feedback or requests during the creation of your product in order to expand on fresh ideas for your project? Many projects fail because the target audience and clients are not understood. So I'd like to know who the ideal consumers are for your product?
Marius: Yes. We launched a devnet bug bounty program, which we used to get feedback from users in exchange for HBB tokens. It's still ongoing.
Q: Staking is one of the strategies that attract users and hold them in long term. Does your great project have plans about staking?
Marius: Staking is currently live. Go check it out at https://app.hubbleprotocol.io/staking.
Q: Do you guys feel satisfied by seeing your progress and achievements until now, when you look back to the day when you have started this project?
Marius: Yes, 100%. It feels great that the thing we worked so hard to build is live and used by actual people. It gives us confidence and motivation to keep building.
KuCoin and Hubble Protocol have prepared a total of 1,200 HBB to give away to AMA participants.
1. Free-ask section: 45 HBB
2. AMA activity: 1,155 HBB
Activity 1 — Quiz: 900 HBB
Activity 2 — Price Guess: 180 HBB
Participation Rewards: 75 HBB
. . .
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