Hubble Protocol Update

Proposal: Tightening the EX Trading Range

This proposal outlines adjustments to the existing protocol's planned design, including changes to redemptions, minting, expansion rates, and xHUBBLE emissions. The proposed adjustments are as follows:

1. Keep redemptions open at all times with a rate based on the current backing ratio (DSR).
2. Keep minting open at all times, with a higher fee for minting EX than xEX.
3. Solidify xEX emission rates for Neutral and Light Epochs.
4. Modify Dark Epoch emissions and Light Epoch emissions of xHUBBLE.

Redemptions and Minting

We propose one modification to redemptions and two modifications to minting.

Redemptions

Redemptions will always be allowed at MIN(0.991, DSR - FEE) stS per EX, where FEE will range from 0.001 to 0.01 stS per EX. The fee will be modifiable by governance and initially set at 0.001.

Minting

• Minting $EX will always be allowed at MAX(DSR, 1.02) stS per EX.
• Minting $xEX will always be allowed at MAX(DSR, 1.009) stS per xEX.

Expansion Rate

Expansion rates will align with the originally intended rates, with modifications to better reflect the state of the peg.

Neutral Epoch

• 0.02% of Total Supply when 1 $EX ∈ [0.991, 0.998) $stS (half of the original planned Neutral Rate)
• 0.04% of Total Supply when 1 $EX ∈ [0.998, 1.002] $stS (the original planned Neutral Rate)
• 0.2% of Total Supply when 1 $EX ∈ (1.002, 1.01) $stS (half of the original planned Light Rate)

Light Epoch

• 0.4% of Total Supply (the original planned Light Rate)

xHUBBLE Emission Changes

Dark Epochs

These emissions reflect the previous set of Dark Epochs and will now come from the protocol's emission reserves:

• Mission Control: Increase from 0 to 11 xHUBBLE per day.
• Captain's Lounge: Increase from 0 to 4 xHUBBLE per day.
• Merchant Docks: Increase from 0 to 1 xHUBBLE per day.

Light Epochs

• Dark Energy: Increase from 4 to 8 xHUBBLE per day.
• Merchant Docks: Decrease from 12 to 8 xHUBBLE per day.

PORK

Modifications to Black Hole Epochs will be discussed at a later date. In the meantime, after the passage of this proposal, no Black Hole Epochs will occur until new governance is enacted.

The Sentiment Factor will contribute to a bonus expansion rate during Neutral and Light Epochs, to be defined in a future proposal.

Additionally, the protocol will experiment with the partial utilization of the Redemption Pool’s stS to generate additional yield. If this proposal passes, the protocol will be authorized to deploy a v2 Redemption Pool for this purpose. However, migration of the existing redemption pool will require further authorization through governance.