bnUSD stability: now incentivised with the Balanced Savings Rate
For a number of months now, the Balanced Dollar (bnUSD) has traded below $1. The Stability Fund, its primary stability mechanism, was all-but empty due to issues that arose with USDS, BUSD, and IUSDC – the only 3 stablecoins it accepted.
Now that Balanced has begun its cross-chain adventure, the Stability Fund also accepts USDC from Archway and Avalanche, in addition to HiYield Treasury Bills. When you swap them for bnUSD, you can use the Stability Fund to mint bnUSD at a rate of 1:1.
Trading through the Stability Fund will help bnUSD stay on-peg, but what would incentivise the demand for bnUSD over another stablecoin?
That’s where the Balanced Savings Rate (BSR) comes in.
The BSR provides a new earning opportunity for bnUSD. Rather than hold bnUSD in your wallet, you can deposit it into the Savings Rate to earn a share of Balanced’s revenue.
Revenue includes a new 2% interest rate for borrowers, and Stability Fund holdings like US Treasury Bills from HiYield (an RWA platform affiliated with one of the Balanced contributors). The ICON Network will also provide ICX incentives as part of the economic enshrinement arrangement.
The increased demand for bnUSD will encourage USDC deposits via the Stability Fund, which will make it easier for arbitrageurs to bring the price back to $1 – and keep it there.
Save bnUSD on Balanced today
The Savings Rate shipped alongside this article, so you can deposit bnUSD now. Rewards begin later this week, after BIP 57 and the ICON enshrinement proposal have been enacted.
To deposit bnUSD into the Savings Rate:
- Sign in to app.balanced.network.
- Go to the Rewards section and click ‘Deposit bnUSD’ next to Savings Rate.
- Choose the amount of bnUSD to deposit, then complete the transaction.
You’ll earn rewards until you withdraw your funds (which you can do at any time). You can claim rewards as you earn them from the panel underneath.
The reward rate will vary based on the projected future yield from loan interest, ICON emissions, and other potential revenue streams, divided by the total bnUSD deposited.
Learn more about the Savings Rate in the docs:
If you have any questions or want to discuss the Balanced Savings Rate, join the community on Discord.