Skip to main content

Security

Learn about the measures Balanced takes to keep its users safe.

Risks of using Balanced​

Before you use Balanced, it’s a good idea to understand the risks:

Smart contract risk. Balanced smart contracts have been audited, but there’s always the possibility of a bug or vulnerability that compromises participants’ funds. It would not be possible to recover them.

Liquidation risk. If your collateralisation ratio drops below 118% (85% LTV), you’ll lose all your collateral, but you also get to keep any borrowed assets.

Redemption risk. If you borrow from Balanced, your collateral can be used as a last resort to keep bnUSD at $1. If the price of bnUSD falls below $0.90 and the Stability Fund is empty, traders may choose to redeem bnUSD for borrower collateral. They’ll receive $0.90 of collateral and repay $0.995 of borrower debt for every bnUSD they redeem. Redemptions are only available via the Balanced Loans contract, and are spread across a group of borrowers to limit the impact.

Smart contract audits​

The Balanced smart contracts have been audited by Hashlock, FYEO, and SlowMist:

Withdrawal limits​

To protect funds in case of an exploit, Balanced has withdrawal limits in place for collateral, the Stability Fund, and the exchange.

A limited percentage of each asset can be withdrawn from these smart contracts every 24 hours. The limits can be changed via governance at any time, but typically range from 8–15%. To view the current limits and how close Balanced is to them, check the Withdrawal Limits section on the Stats page.