SBR/HBB in-app swap

Proposal: The Hubble Protocol should build an in-app swap feature to allow users to trade SBR tokens for HBB tokens directly with the treasury.

Rationale: At the protocol level, the SBR token is a potentially valuable tool. The token provides voting rights on the Saber Gauges, which determine where future SBR emissions are allocated. If a protocol amasses enough SBR tokens, they can control the vote, directing a large portion of the SBR emissions to their preferred Saber liquidity pool.

Intuitively, heavily incentivized liquidity pools tend to attract more capital than similar pools that are not incentivized. For a stablecoin like USDH, which aims to increase its market cap, stability and distribution, building deep liquidity via an incentivized Saber pool holds an obvious appeal. It’s not much of a leap then to understand why amassing SBR tokens would be a priority for Hubble.

Conversely, SBR tokens are not valuable to the majority of retail investors. Because of the sheer quantity of SBR tokens required to meaningfully swing the gauges, most individual investors will never be able to partake in the voting in a substantive way. Understanding this, the token faces continuous and relentless downward sell pressure. At the time of writing, the price of the SBR token is hovering around $0.0037.

Although big APYs, particularly in a bear market, will always attract a certain type of capital, the aggressive downward price action of the SBR token limits the appeal and effectiveness of using it as a means to incentivize a liquidity pool.

A Swap: By building an in-app SBR/HBB swap, users could trade their SBR tokens for HBB tokens directly with the Hubble treasury. The HBB token, while prone to significant volatility across its short lifespan, has held value far better than SBR, is much more scarce, and offers access to protocol revenue sharing, making it a more appealing token to hold. In exchange, the Hubble Protocol would receive SBR tokens, which it can use to incentivize its liquidity pool.

Ideally, this could create a positive feedback loop wherein a heavily incentivized liquidity pool attracts more capital while bringing SBR emissions into the treasury via the swap. The SBR tokens are then used by the protocol to further incentivize the liquidity pool. As the pool grows, this would likely necessitate more USDH minting, meaning that staked HBB holders would receive more USDH rewards as well.

Additional Considerations: Because creating a SBR/HBB swap could cause a significant uptick in total HBB emissions from the treasury, it may be necessary to curtail HBB emissions in other places to avoid excessive dumping on the market. The exact mechanics of how and where this would be done fall beyond the scope of the proposal. However, there are already long term plans in place to phase out HBB rewards from the stability pool, which could potentially be pulled forward.

Once a critical mass of SBR tokens has been achieved, the swap feature can be disabled.

There may be understandable trepidation in Hubble amassing a tremendous quantity of a depreciating asset. The ROI of SBR tokens is not reflected in the price, however. By amassing SBR tokens and gaining influence over the distribution of future emissions, Hubble can incentivize its own liquidity pool into perpetuity without the need to continuously emit their own token. Retail investors can take a longer term approach to providing USDH liquidity as well, knowing that they will be rewarded.


So basically HBB bonds, but purchased with SBR rather than an asset that may actually appreciate in value. It’s an interesting idea, but I wonder if the ROI is really worth it once you model it out. Hubble would basically be selling discounted HBB for a token that will almost certainly debase at a far greater rate than even USD. It’s a risky play just to juice the APY on Saber.

This is a personal take, but I don’t trust Saber for the following reasons:

  • Anonymous team members
  • Integration of unaudited/rugged projects
  • Slow response time from the discord server
  • Tokenomics seem to have no value outside of selling

I believe that it is important to pick integrations very carefully, especially in light of how we dodged integrating UST. It seems that integrating SBR would be a benefit to Saber and a risk to Hubble.

I believe this is actually a very good idea if it is tied to a project that wants to share the responsibility more equally.

What if we draft this as a proposal that we present to Saber, and possibly other services? I think we should try to create partnerships and equally (within reason) profitable for both communities.

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Solana needs a Curve, and USDH will need to have extremely deep liquidity on the protocol that ends up filling that role. At present, it does not seem clear-cut which protocol will do so. If it was beyond doubt that Saber would be Solana’s Curve, then amassing SBR would be an obvious play, but at present, this is not the case.

That being said, there has been SBR accumulation to some extent, but going all-in on this is a very high-risk play considering the general uncertainty surrounding Saber as a platform. The proposal itself is interesting though, and worth keeping in mind for when a Curve equivalent arises.

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To be honest, I share a lot of the same concerns as you (and expressed many of them on the server over the past week or so.) The genesis of this proposal was me incorrectly reading into a few posts and tweets from team members that gave the impression that SBR accumulation might be a higher priority for Hubble than I had originally assumed. With that (incorrect) assumption in mind, I decided to lean into the Saber Wars narrative and wrote this proposal as a means to improve Hubble’s position within it.