Idea: New earn vaults that will act as a yield aggregator for USDH deposits and USDH-x LPs.
Users can deposit USDH that will be leant out to various partnered lending protocols to earn native USDH yield. These deposits will be moved from protocol to protocol based on the highest USDH yield available at the time. To avoid the constant moving of funds and chasing temporary spikes in yield, we establish a set criteria to determine if the move makes sense. E.g. the yield on protocol Y has been X% higher than protocol Z for T amount of time. We can then iterate these criteria to optimise the yield whilst lowering the amount of transfers between protocols savings fees and compute complexity (may not be necessary but I don’t know how difficult or easy this could be).
An additional feature to be added at a later stage could be the option to have this yield pay down a users existing debt creating a self repaying loan in what should be a sustainable way. Alternatively the yield could be added to a users stability pool position, having the choice of both would be good, however I think the self repaying loan would be more popular.
The same process is applied but this time to LP tokens to optimise the yield on farm deposits. As these yields will most likely be in the form of the partner protocols governance tokens we can collect the rewards similar to Quary so that a user can claim them and possibly have an option to covert to USDH within the vault.
Following on from ScarletFired’s comment in the feedback Discord channel, if we were to dump the reward emissions from the collective LP positions this wouldn’t really make it a fair or win win arrangement with the partner protocol. Instead we could accumulate the governance tokens and use them in the voting systems of the liquidity protocols emission gauges to increase the rewards of the USDH based pools e.g. USDH-USDC on Sabre. This would require the optional locking of the users reward tokens for which would would have to provide an IOU token equivalent to the users deposits. To ensure that these IOU tokens would be redeemable a certain amount of the governance tokens would have to held in reserve to cover user withdrawals. (This is based on the protocol using the Tribeca governance protocol other emissions may be controlled in other ways).
These vaults will provide the Hubble users with a convenient place to park their USDH deposits and LP tokens in a way that retains funds within the protocol raising TVL and adds another use case to the protocol. Given the demand for a reliable stable yield having the ability to mint USDH and earn yield on that loan all within the same UI and protocol is a huge selling point for Hubble and may encourage extra USDH to be minted as utility increases.