> For the complete documentation index, see [llms.txt](https://docs.hann.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hann.finance/protocol/usdhn-and-earn.md). # USDHN and Earn USDHN issuance, redemption, and the deposits and rewards in Hann Finance Earn USDHN is Hann Finance’s dollar-pegged stablecoin. Borrowers deposit collateral in a Trove and mint USDHN against it. Earn lets USDHN holders deposit into a Stability Pool that cancels liquidated debt and receives collateral and USDHN rewards. ![USDHN deposits fund a Stability Pool, which cancels liquidated debt and distributes collateral and USDHN rewards](https://2221521122-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8nyFCptMbCTgKUyVYlHX%2Fuploads%2Fgit-blob-86d1599ed9d0d607a04288145c0674b89e79713c%2Fpool-earn.svg?alt=media) *The KAIA branch is shown here. The upper path carries USDHN interest rewards; the lower path carries WKAIA collateral rewards from liquidations. The remaining deposit and the two reward balances are tracked separately.* ## Using USDHN | Action | What happens | | ------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | | Borrow | Deposit collateral in a Trove and mint USDHN. Your debt includes the borrowed amount and applicable fees and interest. | | Repay | Return USDHN to reduce your Trove’s debt. Closing the Trove also releases its remaining collateral. | | Swap or provide liquidity | Trade USDHN in a market or supply it to the USDHN/USDT StableSwap pool. | | Deposit in Earn | Deposit USDHN in a collateral branch’s Stability Pool and receive that pool’s rewards. | | Bridge | Transfer USDHN through the configured cross-chain bridge. On Kaia, bridging uses a separate OFT lockbox adapter connected to the USDHN token. | Borrowing is described in [Borrowing & Liquidation](/protocol/borrowing-and-liquidation.md). Swaps and liquidity are described in [StableSwap DEX](/protocol/stableswap-dex.md). ## How redemption supports the peg A USDHN holder can redeem USDHN for collateral at the protocol’s redemption price. The redeemed USDHN is burned, and the holder receives collateral after the redemption fee. When USDHN trades below $1, buying it in the market and redeeming it creates demand while reducing supply. The trade’s result depends on the purchase price, redemption fee, collateral sale price, and gas cost. When USDHN trades above $1, selling newly borrowed USDHN can increase supply. The borrower still needs enough collateral and pays the loan’s fees and interest. USDHN’s market price moves with trading activity and liquidity. [Redemptions & Risk](/protocol/redemptions-and-risk.md) explains the fee, selection order, and effect on borrowers. ### Rates and USDHN demand ![Two six-step cycles connect USDHN price, redemption pressure, borrowing rates, Stability Pool yield, demand, and the price response. In step 4, pool yield falls above $1 and rises below $1.](https://2221521122-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8nyFCptMbCTgKUyVYlHX%2Fuploads%2Fgit-blob-c869b60672b6fc01f1bde668bd021ed755253461%2Fusdhn-feedback.png?alt=media) | Step | Path above $1 | Path below $1 | | ---- | -------------------------- | -------------------------- | | 1 | Price rises | Price falls | | 2 | Redemption pressure falls | Redemption pressure rises | | 3 | Borrowers lower rates | Borrowers raise rates | | 4 | Stability Pool yield falls | Stability Pool yield rises | | 5 | USDHN demand falls | USDHN demand rises | | 6 | Price falls | Price rises | A borrower who raises the interest rate moves later in normal redemption order and pays more interest. Borrower interest funds USDHN rewards in the Stability Pool. The pool's yield depends on the interest distributed and the amount deposited, and affects demand for buying and depositing USDHN. ## Earn positions The Earn menu includes Stability Pools and the USDHN/USDT liquidity pool. | Position | Asset deposited | How the position changes | | -------------------- | -------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | | Stability Pool | USDHN | Liquidations reduce the USDHN deposit and add rewards in the branch’s collateral token. Protocol interest distributions add USDHN rewards. | | USDHN/USDT liquidity | USDHN and USDT | The pool issues LP tokens that represent a share of its reserves. Swaps change the token mix and add trading fees to the pool. | | LP staking | USDHN/USDT LP tokens | LP tokens move to RewardStaker, where staking rewards accrue. Unstaking returns LP tokens; removing liquidity exchanges those tokens for the pool’s assets. | Each collateral branch has its own Stability Pool. Choose the branch whose collateral you want to receive from liquidations. The KAIA pool pays WKAIA, the HNKAIA pool pays HNKAIA, and the EarnUSDT pool pays wEarnUSDT. ## Deposit into a Stability Pool 1. Get USDHN by borrowing against collateral or swapping in a market. Keep KAIA in your wallet for gas. 2. Open **Earn** and select a collateral branch’s Stability Pool. 3. Open **Deposit**, enter the USDHN amount, and review the transaction. 4. Choose whether to claim existing rewards along with the deposit, then sign in your wallet. 5. After confirmation, check the updated deposit and reward balances. The app calls `provideToSP(amount, claimRewards)`. This USDHN deposit flow has no separate token-approval step. ## Receive or re-deposit rewards A Stability Pool tracks two rewards separately: * **USDHN rewards:** the pool’s share of borrower interest and upfront fees distributed by ActivePool. * **Collateral rewards:** collateral received when the pool offsets liquidated debt. Choose **Claim** to send accumulated USDHN and collateral rewards to your wallet. Your USDHN deposit stays in the pool. Choose **Re-deposit USDHN rewards** to add the USDHN rewards to your deposit. The collateral rewards stay recorded in the pool until claimed. Re-depositing increases the USDHN amount exposed to later liquidations. Rewards are settled when you claim, re-deposit, top up, or withdraw. The displayed APR annualizes USDHN interest distributions relative to the pool’s deposits. Liquidation rewards and changes in collateral prices also affect the position’s total return. ## Withdraw USDHN 1. Open your Stability Pool position and select **Withdraw**. 2. Enter the amount from your current deposit balance. 3. Choose whether to claim rewards in the same transaction. 4. Review the amount and sign in your wallet. The app calls `withdrawFromSP(amount, claimRewards)`. The withdrawal uses your current deposit after liquidation losses, rather than the amount originally deposited. At least **1 USDHN must remain in the entire Stability Pool** after the transaction. Your withdrawal is blocked if it would put the pool below this level. This is a pool-wide rule. If you withdraw without claiming, USDHN rewards are added to the remaining deposit and collateral rewards stay recorded in the pool. The contract also exposes `claimAllCollGains()` to recover recorded collateral after a deposit has been fully removed. ## What changes the value of an Earn position * **Debt offsets:** part of the USDHN deposit is burned to cancel liquidated debt. * **Collateral prices:** liquidation rewards change in value with the collateral token’s price. * **USDHN’s market price:** the remaining deposit can trade above or below $1. * **Contract and oracle behavior:** contract failures, price-feed failures, and branch shutdowns affect execution and asset values. * **Liquidity:** the price received when selling collateral depends on the available market liquidity. [Liquidations & Earn](/mechanics/deep-dives/liquidations-and-earn.md) covers the accounting and numerical examples. [Risk Disclosure](/security/risk-disclosure.md) covers the product’s risks. --- # Agent Instructions This documentation is published with GitBook. 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