Balanced Dollars: The stablecoin backed by multiple collateral types

Balanced Official -

Balanced has taken a big step forward in its cross-chain endeavours with the addition of BTCB (bitcoin from BNB Smart Chain) as a collateral type for the Balanced Dollar stablecoin.

At the start of September, the Balanced smart contracts and app were updated to support new collateral types, which sparked discussions to make BTCB the first collateral type.

The vote to add BTCB as a collateral type was approved earlier today with overwhelming support from the community.

The final results of the BTCB collateral vote.

And the app has been updated to allow for BTCB deposits.

The new collateral selector on the Balanced Home page.

Balanced currently only supports the ICON Network, so this cross-chain collateral type requires the use of ICON Bridge, which you can interact with through the Nexus interface.

Until ICON Bridge completes an extensive security audit, BTCB is considered a higher-risk collateral type, so it can only be used to mint up to 250,000 bnUSD. A low debt ceiling limits Balanced's risk should the bridge be exploited in any way, as it prevents an infinite mint attack, and the $1.6M available in the Balanced DAO Fund can cover any bad debt that arises.

How to get BTCB on the ICON Network

Buy BTC if you don't already have some, then send it to a wallet on BNB Smart Chain (BSC). If you only want to manage one wallet, Hana supports assets on both BSC and ICON.

Once you hold BTCB, you can use Nexus to bridge it to ICON. Learn how to transfer tokens between BSC and ICON.

As liquidity becomes available, you'll also be able to shortcut this process and buy BTCB directly from the Balanced exchange. Because the security audit for ICON Bridge is still underway, Balanced doesn't incentivise people to supply BTCB liquidity.

Use BTCB as collateral on Balanced

After you have BTCB in an ICON wallet, you can deposit it as collateral on Balanced and borrow bnUSD against it.

1. Deposit BTCB as collateral

  1. Sign in to app.balanced.network.
  2. Click ICX in the collateral section, then choose BTCB from the collateral selector.
  3. Click Deposit and choose the amount. The loan section will display how much bnUSD this will allow you to borrow.
  4. Click Confirm and complete the transaction.

2. Mint Balanced Dollars

  1. Click Borrow in the loan section and choose the amount (minimum of 10 bnUSD).
  2. Use the position details section to assess your risk ratio.
  3. Click Confirm and complete the transaction.

Every collateral type you borrow against is a separate position, so your risk for one doesn't affect the other. Make sure to monitor each position carefully and make adjustments as necessary.

Learn how to open, manage, and close a position on Balanced.

What's next for Balanced Dollars?

In addition to ICX and BTCB, Balanced can add support for many different collateral types. After BTCB has been put to the test, the DAO can propose to add another collateral type, or adjust the parameters for the existing ones.

If you'd like to participate in these discussions, make sure to keep an eye on the Balanced forum, and join the community on Discord.