BDollar V2 (BDOV2) Dollar Fails To Peg

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bDollar

bDollar V2 was a branch of bDollar, which was an attempt to restore the peg of bDollar, originally lost in March 2021. While the token is not listed in many places, based on market data it appears that the peg was never really established. The bEarn smart contract suffered an attack shortly after the launch, which likely dampened the enthusiasm for the new stablecoin.

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."

"Another notable thing is the launch of BDO v2.0 and initiating the migration process for this new token. The new BDOv2 smart contract allows us much more flexibility to adjust to the market. Already we have implemented the first mechanism intended to help BDOv2 to peg: burning of BDOv2 on every transaction while BDO is under 1$. Of course — we are proceeding with development to make BDOv2 partially collateralized in order to bring stability to this token in the long run."

"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!"

"Partially collateralized: 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. (More details to be provided in the coming days)"

"Deflationary mechanism: There will be a small transaction fee for every $BDO transaction. The fee ratio will be adjustable through voting by the bDollar’s governance. A snapshot page will be shared within the next 7 days to allow the community to decide on this fee."

"Flexibility: By making the smart contract upgradable, it will become possible for us to make further cool changes in the future and allow us to remain adaptable."

"Please note that there is no deadline to swap. However, the sooner you migrate to the new version, the more benefits you will receive as there will be many pools, yields to earn #juicy APY for BDO V2.0" "We will continue to work on the migration progressively throughout June to ensure all previous BDO use-cases will support BDOv2. More changes and updates regarding BDOv2 will be announced in the near future."

"bDollar 2.0 (BDOV2) Not Priced $0.010207 as of: 10/28/2022"

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.

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• Known history of when and how the service was started.
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• How were people recruited to participate?
• Public warnings and announcements prior to the event.

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• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
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The Reality

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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 V2 (BDOV2) Dollar Fails To Peg

Date	Event	Description
May 13th, 2021 7:35:00 PM MDT	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 $34,096,000 USD.

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Immediate Reactions

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Ultimate Outcome

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Total Amount Recovered

The total amount recovered is unknown.

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Ongoing Developments

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General Prevention Policies

The bDollar protocol failed to have sufficient 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.