Redemption

Last resort protection of bnbUSD's peg

Strategic Last-Resort Peg Protection

Redemptions function as a critical final layer of protection for bnbUSD's peg integrity. This mechanism is designed to activate only when Peg Protection Mechanisms fails

Guaranteed Dollar-Value Redemption

The redemption framework guarantees that bnbUSD can always be exchanged for precisely $1 worth of underlying collateral, establishing an immutable price floor regardless of market conditions.

Systematic Leveraged Position Reduction

During redemption events, the protocol systematically reduces debt from corresponding positions using a priority algorithm. This process begins with the most highly leveraged positions and enforces strict proportional limits on individual position reductions before proceeding to positions with lower leverage levels.

Market-Driven Peg Restoration Incentives

This mechanism creates economic incentives for arbitrageurs to purchase bnbUSD whenever it trades below peg for profit.

Transparent Redemption Execution

Redemptions can be initiated through a dedicated smart contract interface, ensuring programmatic access to this critical stability feature. All transactions are fully transparent and verifiable on-chain.

Governance-Managed Parameters

Important redemption parameters including fee structures and maximum redeemable proportions per position are carefully calibrated by governance to balance system stability with user protection. These parameters are publicly documented and accessible to all participants.