What is Balanced Dollar (bnUSD)? A Comprehensive Guide

2025-11-20

In the evolving world of decentralized finance (DeFi), Balanced Dollar (bnUSD) stands out as a stablecoin designed to track the value of 1 USD while leveraging the power of blockchain technology and cryptocurrency collateral.

Built on the Balanced platform, bnUSD offers a unique value proposition in the DeFi ecosystem by providing users with a decentralized and collateral-backed stablecoin.

This article will dive deep into what Balanced Dollar is, how it works, and how to buy it, along with a detailed explanation of its price dynamics and features.

What is Balanced Dollar (bnUSD)?

The Balanced Dollar (bnUSD) is a decentralized stablecoin that aims to track the value of 1 USD. Unlike traditional stablecoins that rely on centralized entities to maintain their peg, bnUSD is backed by cryptocurrency collateral.

This over-collateralization ensures that the supply of bnUSD cannot exceed the value of its backing assets, making it a more secure and reliable stablecoin within the DeFi ecosystem.

Balanced Dollar is a product of the Balanced platform, a cross-chain DeFi hub that enables fast, affordable, and easy-to-use solutions for users.

The platform is home to bnUSD, a decentralized exchange, and a savings rate system that allows users to earn rewards.

How Does Balanced Dollar Work?

Balanced Dollar operates using a collateralized debt position (CDP) model, where users deposit cryptocurrency assets as collateral to borrow bnUSD.

This stablecoin is designed to maintain its value relative to the US dollar while offering flexibility for various DeFi applications.

Here’s how it works:

Collateralization: Users can deposit cryptocurrency as collateral to mint bnUSD. The collateral ratio is currently set at 128%, meaning the value of collateral must exceed the amount of bnUSD minted to ensure the stability and over-collateralization of the token.
Borrowing bnUSD: Users can borrow bnUSD at a 2% annual interest rate with a 0.2% fee. This allows users to access liquidity in the form of a stablecoin while keeping their crypto assets as collateral.
Supply Liquidity: bnUSD can also be used for liquidity provision on decentralized exchanges (DEXs), allowing users to earn trading fees and rewards by pairing bnUSD with other assets.
Savings Rate: The Balanced Savings Rate (BSR) allows users to deposit bnUSD and earn interest on their holdings, paid in sICX (the staking token of ICON). This provides an additional incentive for holding bnUSD rather than trading it.
Stabilization Mechanism: To ensure that bnUSD stays pegged to 1 USD, the Balanced exchange allows users to trade bnUSD 1:1 for other stablecoins like USDC and USDT. This helps maintain price stability during times of market fluctuation.

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Balanced Dollar Token Explained

The Balanced Dollar token (bnUSD) is designed to be used across multiple blockchain ecosystems.

By being cross-chain, bnUSD can be used on various supported chains, increasing its utility and accessibility. Currently, bnUSD is over-collateralized by assets worth over $6.2 million, with a collateral ratio of 128%.

Key Features of bnUSD:

Collateralized Stablecoin: Backed by a diverse range of cryptocurrencies to ensure stability.
Low Fees: The ability to borrow bnUSD comes with a low 0.2% fee and a 2% interest rate, making it an affordable option for liquidity.
Cross-Chain Compatibility: bnUSD can be used across 10 different blockchains, enhancing its flexibility.
Over-Collateralized: Ensures a stable supply by maintaining a collateral ratio higher than the amount of bnUSD in circulation.
Rewards System: Users can earn interest by participating in the Balanced Savings Rate, with current rewards distributed in sICX.

Balanced Dollar Price and Market Dynamics

The price of Balanced Dollar (bnUSD) is designed to be pegged to 1 USD, and as of now, it is trading at $1.008, with minor fluctuations around this value.

Its over-collateralized nature means it remains relatively stable compared to other stablecoins, which can sometimes fluctuate due to external market conditions.

Because of its decentralized and collateralized structure, the price of bnUSD may sometimes deviate slightly from the 1 USD peg.

However, mechanisms like the Balanced exchange and collateral ratio help keep the price within a narrow range of 1 USD, ensuring minimal volatility.

How to Buy Balanced Dollar (bnUSD)?

Purchasing Balanced Dollar (bnUSD) is straightforward and can be done through several methods:

Using the Balanced Exchange: Go to the Balanced platform and use the decentralized exchange (DEX) to trade other cryptocurrencies like ETH, USDT, or USDC for bnUSD.
Borrow bnUSD: You can also borrow bnUSD by depositing collateral (such as ETH or BTC) on the Balanced platform. This gives you access to bnUSD for a low 0.2% fee and 2% annual interest.
Cross-Chain Support: As bnUSD is cross-chain compatible, you can transfer it to any of the supported blockchains (such as Avalanche, Binance Smart Chain, etc.) to use it for DeFi applications or liquidity provision.

Conclusion

Balanced Dollar (bnUSD) represents a major step forward in the world of decentralized finance.

Its ability to maintain a stable value, backed by cryptocurrency collateral, and its cross-chain functionality makes it a versatile tool in the DeFi ecosystem.

Whether you’re looking to borrow stablecoins at low fees, participate in liquidity pools, or earn interest through the Balanced Savings Rate, bnUSD offers multiple avenues for users to engage with the growing world of decentralized finance.

The Balanced platform continues to innovate with low-cost transactions, rewards for staking, and a collateralized debt position (CDP) system that makes the token secure and reliable for users.

As DeFi continues to grow, bnUSD has the potential to become a go-to stablecoin for blockchain enthusiasts and traders alike.

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FAQ

What is Balanced Dollar (bnUSD)?

Balanced Dollar (bnUSD) is a decentralized stablecoin designed to maintain a value of 1 USD. It is collateralized by cryptocurrencies, ensuring its stability through over-collateralization.

How does Balanced Dollar work?

bnUSD is minted by users who deposit crypto as collateral. It is used across multiple blockchains for borrowing, liquidity provision, and earning rewards through the Balanced Savings Rate.

How is the price of Balanced Dollar (bnUSD) maintained?

The price of bnUSD is maintained by over-collateralization, with a collateral ratio of 128%. Users can trade bnUSD 1:1 for USDC or USDT on the Balanced exchange to stabilize its value.

How do I buy Balanced Dollar (bnUSD)?

You can buy bnUSD through the Balanced exchange or by borrowing it on the Balanced platform using cryptocurrency as collateral. It is also available across multiple blockchains for cross-chain use.

What is the collateral ratio for Balanced Dollar (bnUSD)?

The collateral ratio for bnUSD is 128%, ensuring that the total value of the collateral backing bnUSD exceeds its supply, providing stability and security.

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Disclaimer: The content of this article does not constitute financial or investment advice.

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