Hubble Protocol and Everstake: Twitter Spaces Recap

We proudly announce that Everstake has become a partner of Hubble Protocol, one of the most prominent DeFi borrowing platforms on the Solana network. 

A couple of weeks ago, we chatted with Hubble Protocol’s Head of Growth, Mark Hull, about products on Solana, liquid staking, staking pools, validators, and DeFi risks.

Here is a summary of our conversation.

Product Development for Solana

Since the beginning of our work with Solana, Everstake has been not just a validator but also an active community member. There is a simple reason: our team wants to bring value to it. Everstake released a dashboard for staking pools last year. 

USDH: Hubble’s Liquid Staking Coin for Solana

Hubble has its coin for liquid staking, too, USDH. It’s a stablecoin that is minted and loaned to users once they deposit their SOL for staking. One of the main goals for USDH is to grow use cases in DeFi. 

As this topic is relatively new, people are still figuring out what liquid coins do and why they need them. Hubble is working on educating people about liquid staking, too. For example, they have just launched eSOL/USDH liquidity on Orca, so users can go and deposit there. 

Orca – Solana’s liquidity AMM – provides many opportunities for capital efficiency. They have two types of pools: concentrated liquidity pools and classic pools. The total value locked in Whirlpools is $33M, where $20M is traded daily. For example, the eSOL/USDH trading volume went up to several thousand daily transactions and reached 60 thousand in liquidity after a couple of weeks. It will increase interest in eSOL and liquid stacking and contribute to decentralization.

Hubble’s New Product to Address DeFi Risks

There are some economic risks related to using a Whirlpool liquidity spread. There is a phenomenon called impermanent loss, also sometimes known as divergence risk. It means that when the price changes, the distribution of tokens also changes. 

For example, you own two tokens: eSOL and SOL. If the SOL price goes up, the amount of your SOL coins decreases, and the amount of dollars increases. It is not an actual loss but rather an opportunity cost. There are ways to address this issue, such as by providing liquidity with a 5% range of the current price. It requires a deep understanding of liquidity spreads and intensive decision-making. 

Hubble is developing a new product, Kamino, to deal with this problem and take over the decision-making around the price ranges and rebalancing.

Our team is excited to partner with Hubble Protocol and values the time and effort to make this collaboration prolific.

Check our Twitter for the latest updates from our company, and read our Blog for more information about our partnerships and ongoing issues.