BDollar (BDO) Stablecoin Peg Lost

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bDollar

bDollar was a purely algorithmic stablecoin, designed to adjust the supply to maintain a price of $1 USD. The total value locked reached an all-time high of $120m on March first, before some controversial changes were introduced to the protocol by the team. By March 24th, 2021, the protocol had lost it's peg. Awards, audits, and even the launch of bDollar V2 failed to restore the peg. Some portion of the amount invested was successfully withdrawn as the price fell.

This is a global/international case not involving a specific country.

About BDollar

"bDollar is an algorithmic multi-peg stablecoin running on Binance Smart-chain." "bDollar Protocol is designed by the Bearn.fi team as the first algorithmic stablecoin on Binance Smart Chain. It involves an innovative solution that can adjust the stablecoin's supply deterministically to move the price of the stablecoin in the direction of a target price to bring programmability and interoperability to DeFi."

"Inspired by Basis and its predecessors, bDollar is a multi-token protocol that consists of the following tokens: bDollar (BDO), bDollar Shares (sBDO), and bDollar Bonds (bBDO) and multiple Multi-Pegs Tokens."

"Completely decentralized on-chain governance." "Although many wide variety of stablecoin mechanisms exist, bDollar Protocol specifically uses an “algorithmic central bank” approach to manage the supply of tokens according to a predetermined logic. The algorithm is in charge of balancing stablecoin supply to a fluctuating demand, ensuring that the token price remains relatively stable."

"bDollar Shares loosely represent the value of the bDollar Protocol and trust in its systemic ability to maintain BDO to peg. During epoch expansions (when TWAP - time-weighted average price of BDO is above the 1 $BUSD peg), the protocol mints BDO and distributes it proportionally to all sBDO holders who have staked their tokens in the boardroom."

"Additionally, sBDO are used to achieved a completely decentralized on-chain governance where sBDO holders have voting rights and the ability to create proposals to improve the protocol. sBDO has a maximum total supply of 100,000 tokens. 15,000 sBDO are allocated to the team and DAO (7,500 each) and vested linearly over 12 months. The remaining 85,000 sBDO are allocated for incentivizing Liquidity Providers in 2 shares pools."

"During previous contractions, boardroom stakers didn’t get any rewards while (TWAP below 1). But after several updates this has changed to also benefit all the shareholders staked in the boardroom and be rewarded with a very good APR even when in contraction."

"Important Updates: 10% of the BDO from the Bought-Back Fund will be sent to incentivize the boardroom during contractions. 5% of the BDO used to purchase bonds are sent to the Boardroom instead of getting burned right away. The first 15 minutes at the start of each epoch, all boardroom stakers are allowed to use their pending boardroom rewards to purchase bonds with no lockups nor tax applied. 5% tax will be charged (to burn) from the claimed BDO rewards if TWAP is within range (1.00, 1.025) and 10% if TWAP is less than 0.998."

"Total Value Locked of bDollar ATH: $120M+" reported on March 1st, 2021.

"Since the beginning, we have formed an idea about creating a Seigniorage protocol that is able to give out Multi-Rewards for Boardroom stakers, and this is where the state-of-the-art Multi-Pegs concept comes from. We consider this concept ready to be brought forward and implemented, which will mainly help give BDO but also bBDO, sBDO, BFI, (sBFI) some newly added innovative use cases and increase the incentives to those loyal bDollar Community members."

"Building further on the existing Seigniorage concept, [after March 31st, 2021] we will create new Algorithmic assets never seen before on the Binance Smart Chain network and the first we are very excited to introduce is bpDOT — the next Algorithmic token running under bDollar Protocol, which will use sBDO and current Boardroom for its Seigniorage mechanism, effectively making boardroom give out “Multi-Rewards” (Up to 20+ rewards)."

"Due to the recent accelerated growth of the project, we have come to the conclusion that the current BDO smart contract is not flexible enough to support the vision that we wish for it to encompass. Thus in order to open up more possibilities and to have a greater impact on the success of the ecosystem — we have decided to make some significant changes. We are thrilled to introduce to you our new concept for BDO V2.0!"

"In order to bring stability to the value of $BDO, going forward it will become partially collateralized in order to support it as a fully decentralized stablecoin and give it the tools it needs to maintain a peg value of $1."

"In the period of mid march 2021 you can see the protocol had achieved a near perfect peg of 1$ for BDO (this was the time before other multi-pegs were implemented). Unfortunately, due to a combination of various conditions - the majority of the community fell into a spiral of panic selling of the valuable asset sBDO (worth 8-8.5k at the time) when BDO was just under 1$ (0.99998). Since BDO was never under peg for an extended period before this time - many investors panic-sold sBDO because the boardroom was not minting new BDO tokens during this time of contraction. This lead to a cascading dumping of the price that the protocol is at this time still trying to recover from. Unfortunately, the damage to sentiment was significant."

According to CoinGecko and Nomics, the stablecoin had already started to lose it's peg as of March 24th, 2021.

"31 March 2021: Multi-Pegs introduced with bpDOT."

On April 4th, 2021, "bDollar [was] selected as top 5 Most Valuable Builders (MVB) on BSC" and "Certik has been working through the audit process for the bDollar smart contract and comes to the conclusion that all of the functions in the protocol have proper access restriction and parameter sanitization when necessary. The equity was found to be calculated correctly for each of the accounts. Most of the findings are optimizational."

"Fortunately - the innovation and determination of the team is still there. The team has not stopped building and improving their ecosystem, and they are not giving up on their effort to regain market sentiment."

bDollar price [as of November 4th, 2022] is $0.033493051191 with a 24-hour trading volume of $712.51.

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

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The Reality

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• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - bDollar (BDO) Stablecoin Peg Lost

Date	Event	Description
March 24th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $120,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

The bDollar protocol failed to have any collateral or insurance to protect users in the event of a depeg.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.