Before you invest money into 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 collateralization ratio drops below 150%, you’ll lose all your collateral, but you also get to keep any borrowed assets.
Rebalancing risk. When you deposit ICX into Balanced, it’s used to keep the value of Balanced assets stable (so traders can always sell bnUSD for $1 of ICX). If you've borrowed from Balanced, some of your collateral will be sold over time, but your loan will also be reduced by an equal amount. Learn how rebalancing affects your position.
Impermanent loss. If you supply two assets to a liquidity pool and the value of one (i.e. sICX, BALN) rises in comparison to the other (i.e. bnUSD), your supply ratio will move in favor of the bnUSD as people trade within the pool. On paper, your assets will be worth less than if you held them in your wallet, but the loss only becomes permanent if you withdraw liquidity before the price falls again. Learn more about impermanent loss.
The Balanced smart contracts have been audited by SlowMist, and reviewed by ICON experts and third-party developers.
Balanced has an ongoing bug bounty program through Immunefi, which is targeted at bugs and vulnerabilities that put investors’ funds at risk or compromise the smart contracts.