Getting Started with Solana, Defi and Hubble Protocol

Defi is a fascinating way to learn the ends and outs of cryptocurrency and blockchain, and earn some passive income while you do it.

Establish a Solana Wallet

https://phantom.app/

 

BE SURE to write your recovery keys down. personally I do it in a like 3 places. This is the only thing you will have to prove you own cryptocurrency associated with this Solana account.

Acquire some SOL

SOL is Solana's cryptocurrency.

Probably the safest and easiest way for a beginner is to use Coinbase

If you sign up with this link to get SOL for this tutorial you will get $10 which will allow you to try this for free https://www.coinbase.com/join/raines_nt

You can buy SOL on Coinbase pretty easily through ACH or Debit cards. Coinbase is a publicly traded company so I find it to be the safest , least confusing option.

 

Send SOL to your Solana Wallet

After purchasing some SOL from Coinbase you need to send the SOL to your Solana Wallet.

There is often a waiting period as your transfer clears before you have full access to all of the cryptocurrency you just bought but you should have a percentage that can be used for this exercise.

 

  • Open up your Phantom Wallet.
    • It will be with your browser extensions most likely in the top right
  • Copy your Wallet's Solana Address
    • You should just be able to hover over the top bar of the wallet and copy
  • Inside of Coinbase, click Send / Receive 
    • Enter the amount of SOL you want to transfer
      • Use the up / down arrows on the right to switch from amount of fiat currency to SOL.
    • Paste your wallet's address inside of To:
    • Click Continue
    • Send Now
      • You will get a confirmation screen that shows you how much you are sending and how much gas it costs.
        • Gas is just how much you are paying for the transaction to take place on the blockchain.

Your SOL will be sent from your Coinbase account to your account associated with your Phantom Wallet.  This may take a little bit of time to appear in your Phantom wallet. This is the nature of the blockchain as the transfer needs to be verified.

 

Connect your Wallet to the Hubble Protocol

Hubble Protocol is an exciting new DeFi platform on the Solana blockchain. It is a great way to make passive income while learning about cryptocurrencies and blockchains. DeFi platforms are very common on every blockchain i.e. Ethereum, Binance, Solana

At the heart of Hubble Protocol is using your SOL as collateral to borrow a stable coin called USDH token -- loosely US Dollar Hubble. The Hubble Protocol ensures 1 USDH is approximately equal to 1 US dollar.  

USDH can then be used throughout the Solana ecosystem without using up your collateral.

WARNING: DeFi is inherently risky. This is not financial advice, and you can lose money.

To maintain the health of the protocol your collateral can be liquated if the system or your personal loan have too high of a loan to value (LTV) ratio. As long at your loan's LTV remain below 66.6% you won't be liquidated. The risk is in if the market value of SOL drops. As the value of SOL drops your Loan to Value will increase.

 

You can monitor the LTV of your loans on your dashboard: https://app.hubbleprotocol.io/dashboard

 

 

A Simple Hubble Protocol Strategy

  • Deposit SOL as collateral into Hubble Protocol.
  • Borrow USDH against the SOL you deposited.
    • I suggest borrowing <50% of the value of your SOL
    • Keeping a Loan to Value < 50% will mitigate your risk of liquidation.
      • You can borrow up to 90.9% when the system is healthy, but if you the value of SOL were to drop why you weren't looking or if the system itself fell into recovery mode, you would be quickly liquidated.
      • Liquidation actually isn't that scary as you would only lose about 10% of the value of collateral at the time of liquidation. You would lose your collateral  and keep the commiserate value in USDH.
  • Add your USDH to the Stability pool https://app.hubbleprotocol.io/stability
    • While your USDH is in the stability pool, you will earn both
      • HBB token
      • liquidation rewards.
        • Remember above when we discussed liquidation,
          • Any time a loan is liquidated the collateral that is liquidated is distributed to the accounts who participate in the stability pool.
  • Harvest your HBB
    • HBB is rewarded for participating in the stability pool
    • After some HBB have built up, click Harvest
    • This will move your HBB to your Phantom Wallet.
  • Stake your HBB

 

 

 

 

 

Amazon Recommended Books