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Introduction
Balanced is a DAO (decentralised autonomous organisation) consisting of a decentralised balance sheet of cryptocurrency collateral, with the vision of creating a stablecoin backed by a variety of blockchain-based assets from different ecosystems.
Participants mint and borrow bnUSD, a stable asset designed to track the value of one US Dollar. Balanced provides traders with clearly defined arbitrage opportunities in order to maintain the stability of bnUSD, and holders of volatile blockchain-based assets an opportunity for leverage.
There are two ways to mint bnUSD: one for the purpose of arbitrage and stability, and the other for the purpose of leverage.
Participants interested in leverage (Borrowers) may deposit volatile collateral (i.e. ICX) to mint and borrow bnUSD against their collateral. Borrowers will have debt denominated in bnUSD that must be repaid in order to withdraw their collateral. Borrowers' collateral and debt may also be rebalanced during periods of extreme volatility to maintain a certain range of buying power for bnUSD on the Balanced decentralised exchange.
Participants interested in stabilising the bnUSD price via arbitrage can mint bnUSD by swapping other types of stable assets (i.e. USDC) at a fixed ratio for bnUSD, and vice versa. This fixed ratio provides clear arbitrage opportunities to stabilise the value of bnUSD.
Balanced participants are also rewarded for their contributions. Participants using volatile collateral or market making on the decentralised exchange will be rewarded with Balance Tokens (BALN). This process will be referred to as “mining”. Balance Tokens represent ownership in the Balanced DAO and come with several benefits discussed in the Balance Token economics section.
An excellent use case for blockchain-based tokens is as a form of collateral. Balanced can bring this use case to many blockchain-based assets, with the goal of building bnUSD into an over-collateralised, vastly diversified and stable form of payment running on fully decentralised infrastructure.
Last modified 3d ago
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