HBB’s role within Kamino

Discussion
#1

This topic will serve as a discussion for the role of HBB within Kamino, and how Kamino can deliver value for HBB. Please read through the post and leave your thoughts.

Quick introduction to Kamino

Kamino Finance recently launched on Solana mainnet. Kamino offers automated vaults that manage concentrated liquidity positions, such as Orca Whirlpools.

This has been in large part possible by the help of Hubble, through which Kamino was incubated earlier this year. Kamino’s close relation with Hubble also feeds into the role of HBB within Kamino. There are a few aspects to the proposed role of HBB within Kamino. At present, these are as follows:

  • HBB as incentives
  • Rewards to HBB stakers
  • HBB buybacks via Kamino fees

Current use of HBB

Initially, HBB will be used as an incentive to bootstrap TVL for Kamino. HBB will be rewarded across all vaults, and users will immediately start earning HBB once they deposit into Kamino.

HBB incentives will be awarded as HBB Call Options, facilitated by Zeta Flex. Call options will be airdropped just as any other incentives. After receipt, users can choose if they want to exercise their options on the Zeta Flex portal (Zeta Flex 💪).

What could be next for HBB, with the growth of Kamino

The first phase is to draw liquidity for Kamino, though this will not be the only impact that Kamino has on HBB. To recognize the contribution that Hubble has made to Kamino, it’s desirable that inflows to Kamino’s revenue are also used to return value to HBB. Kamino’s revenue grows via fees, for example consisting of:

  • Deposit Fees
  • Withdrawal Fees
  • Performance Fees

There are a range of measures that could be employed to utilize these fees to benefit the HBB ecosystem, such as the following;

  • A portion of these fees can be distributed directly to HBB stakers as yield, thus incentivizing deposits into Hubble’s HBB Vault, and adding buy-pressure on HBB itself.
  • The fees earned by Kamino could be used to buy back HBB on the market. This has the potential to positively impact HBB price, as it reduces circulating supply.
  • HBB stakers could be incentivized to lock their HBB for a period of time, in order to receive Kamino fees

HBB’s holders feedbacks

We would like to invite the Hubble community to voice their own opinion and provide feedback on the above ideas, as well as provide any additional input.

We want to be as open as possible regarding what you, the holders of HBB, would like to see for the role of HBB within Kamino. Please share your thoughts below.

2 Likes
#2

Adding buyback pressure on HBB IMO is one of the most important things to do at the moment, to avoid diluting the value of HBB. Without general voting power at the time of this proposal, HBB lacks intrinsic value.
Adding locking periods for HBB staking is also a great way to complement this strategy by reducing the supply of the token (UXD does something similar:https://stake.uxd.fi/). Together, both dynamics will enable a more stable price on HBB while both protocols evolve to bring more intrinsic value.

An additional good mechanic would be to ease the process of staking or reinvesting Kamino incentives. Allowing users to re-invest their rewards in their Kamino vaults will maintain and increase the Kamino TVL. If as an alternative, the user also has the opportunity to move their rewards from Kamino into their HBB vault, this would ensure the lock and reinvestment of the rewards.

Net: This proposal makes a lot of sense economically for the evolution of both protocols.

5 Likes
#3

Interesting idea about moving HBB to the vault, but have you heard about the HBB call options rewards? Really cool way to incentivize core users to “choose their own adventure” and discourage pure farm dumping of the token. Wondering, if given the chance, would users opt for an option for discounted HBB or having it insta-escrowed for the incentives in this proposal. Could hedge 50/50?

3 Likes
#4

gm, first post in this forum.

I absolutely think it’s the right way to go for HBB to play a key part in the revenue of Kamino. What way it should be, buy and burn or rewards is up to the lawyers he-he. There’s instances where a team or dev create a new project and the holders of the previous project’s token do not or to a little degree benefit from the new one which I think is wrong and immoral

1 Like
#5

1/ Use Kamino Service Fees to buy SOL which is then invested on Hubble.

2/ Then mint USDH from the SOL @ ? LTV

3/ Hubble Protocol keeps half of USDH to maintain position

4/ The other half is distributed to HBB stakers on Hubble increasing APY

HBB has intrinsic value because it receives rewards based on the success of the ecosystem, UNLIKE Solend which is purely a governence token. HBB has so much potential and is underpriced v SLND.

The above method drives the TVL on Hubble to which a lot of people price the native token. HBB go UP🚀

1 Like
#6

Considering that HBB will be sold by the vaults to generate the autocompound yield, then a buyback is needed.

#7

What SOL crashes and the position gets liquidated?

#8

I guess this might be a chicken and egg thing.

Drive more TVL to Hubble borrowing now? Or drive deeper liquidity of $USDH to people are naturally more inclined to borrow more on Hubble?

#9

Thank you @belami for putting this together. It is a very important topic of discussion for sure.

Historically speaking, protocol tokens have been a way for token holders to get exposure to the growth of the protocol. We went through DeFi summer and saw protocols fighting for attention / liquidity and threw out massive amounts of their token which led to hard dilution of the supply. We saw that exposure through dilution of the supply was not a sustainable approach.

We recently saw that Uniswap was discussing turning the fee-switch on, which finally gives users an opportunity to earn a piece of the ‘protocol revenue’ by having exposure to the protocol token. Seems like this is something that users want.

Sustainability
Hubble realised very early, that to build a stablecoin in a secure and sustainable way, we need to be careful with incentives and to allocate where it makes sense. We don’t want to dilute the supply by reducing our power in the future by spending too much now.

Value accrual to HBB
This seems to be the best way imho. Having fees accrue to whichever extent to HBB stakers is something which is a no-brainer for me. It gives holders of HBB, which in the # of holders is largely retail and opportunity to ‘be early’ and to be rewarded for believing in what we do, believing in that we can execute on our long term vision.
From a user perspective, I want to be rewarded for the risk I take of holding a volatile asset. Being early and potentially also knowing I’m earning actual yield / revenue from the protocol gives me a sense of security and wellbeing from the perspective of a user.

I see this as another ‘source of protocol revenue’ which adds utility to the HBB token. Actual utility for me means that HBB gains more and more trust in the broader Solana ecosystem as a token which has a reason to exist.

What I don’t have a clear opinion on yet, is which of the range of measures mentioned would be the better one. Curious to have more input from the community on this one.
Intuitively, I might be against the market buy backs since it seems more ponzi-like for an observer from the outside.

Rewarding people who take on risk / who believe in what we do seems to be the name of the game and locking and / or distributing fees to HBB stakers as yield seem to be a fair way to approach things.

#10

What would you suggest for easing the process of reinvesting the HBB rewards? What I gather from the way you’ve stated it, is that on the claim/exercise window, there should be two buttons:

  1. Exercise options (with an input that selects how much you want to exercise)
  2. Excercise & Compound (also with amount selection)

Is that more or less what you have in mind?

1 Like
#11

If Sol crashes, the saved USDH from borrowing against the SOL can be used to reduce the position. However, SOL is the hardest asset in the whole ecosystem. At the moment Hubble’s TVL is based mainly on SRM

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#12

It does both. Rewards HBB holders and adds TVL to the protocol. Currently the TVL is predominantly SRM which concerns me.

2 Likes
#13

this is great input thanks! Locking periods is definitely something we’re taking seriously. And I love the suggestion about being able to reinvest the HBB incentives back into their HBB vault, to compound their yield from fees via HBB staking

1 Like
#14

Yes, that sounds pretty straight forward and also simple for the users.
Or even an automatic setting at the time of entering any vault, to predefined the rewarding method. Making users more involved in their investments. This would also consider that rewards could be accrued daily and not monthly.

#15

If sustainability is a key focus, then using $HBB as incentive for Kamino isn’t feasible, long term. Except of course, there would be a steady buyback plan in place. But that kind of feels like just circling around funds.
However, I agree on implementing withdrawal & performance (not depositing) fees on Kamino to generate revenue, for both Kamino & Hubble. Fees should automatically be in full or part a stable, I guess we all know why.
I’m not a degen but there are some degen opinions by @Flyinginferno & @_whycf up there that the team can look into too. Whatever path is taken, the long term viability of both protocols should be the key centre of attention.

Ps. Can we’ve a graphical representation of the relationship of both protocols? Maybe, the community would able to give their opinions.

1 Like
#16

I like the idea of simply distributing X% of protocol fees from Hubble and Kamino to HBB stakers. I think this would give a really powerful narrative, use our products to supercharge your liquidity, stake HBB to invest in the team/products/vision. Even currently I feel the fact that most Hubble fees are distributed to HBB stakers isn’t advertised more is a missed marketing angle.

Some other ideas, having the HBB vault be replicated so its the same one on Hubble and Kamino, auto stake Kamino HBB rewards, distribute both sol and USDH as rewards, and enhanced staking rewards for locking in. I have seen a few other projects do lock-in with a 4 year option (seems like eternity in crypto, but a lot of investors want to make long term bets right now) .

1 Like
#17

I think buy back and redistribution to stakers is enough as a mechanism.

Another option would be to turn all profits to USDH and then distribute to HBB stakers.

I disagree with locking, defi should be flexible. If the tokenomics are robust and the price is right it will not be apealling to sell, if the price is high you should have the option to sell - this is part of the price discovery. Also you should have the option to move them around as a collateral in case of an emergency.

#18

Hi all!
IMHO every new project on Kamino and Hubble Protocol itself should be taxed in favor of HBB stakers. In this case accepting HBB as payment in real world will make sense.
The HBB vault should be the reason why Hubble Protocol and Kamino exist. As been pointed on forum only few people understand value of HBB. However if you put HBB value as a front line of the Protocol inevitably it will lead more investors to Kamino as well.
As a conclusion answering the question “why should I accept HBB as a payment?” should show whole moneymaking system behind it.

#19

  • I don’t like ‘buy backs’… because it’s outside of my control as an individual investor.

  • I don’t like ‘lock ups’ … because it has no financial flexibility in a fast moving/evolving environment (see ETH​:bangbang::roll_eyes:)

  • HBB stakers are the risk takers who see the potential in the platform. The main & ever present risk is a hack. Hopefully Hubble will not be Open Source but I appreciate that’s the goal.

  • HBB has MASSIVE intrinsic value if holders are rewarded with Hubble & Kamino lending & trading fees.
    Imagine the fees generated in the next Bull Run🚀

  • BUT HBB is not infinite :white_check_mark: :white_check_mark::white_check_mark:
    (incidentally top ten holders only hold 54% :clinking_glasses:)

*So long term what should HBB stakers be rewarded with❓

*My suggestion is SOL - (Paid in the same time frame as the auto-compounding on Kamino) from fees of both platforms…
Published APY based on previous day’s returns :bangbang::+1:

*Receivers of this SOL should then have the pre option to auto-compound trading of it directly back into HBB or sell it for USDH or borrow USDH against it with no fees in a separate, individual, over collateralised account.

  • SOL is infinite and the foundation of the ecosystem and tradable throughout it - giving complete financial flexibility. This system is clear & straightforward. Everyone here trusts SOL.

  • This will increase platform TVL because HBB, USDH & SOL over collateralised DeFi loans are :fire:

  • Finally, it’s a hidden secret, outside of Hubble, that Kamino rewards HBB holders. I like that because I don’t want the HBB price to go up until the next Bull :blush:

#20

Receiving both fee rewards and liquidation rewards with a single hbb case instead of 2 different cases will positively affect the price of hbb.