Safety Net for Smart Yield Accounts

To earn and gain a daily yield, the assets put in Smart Yield wallets are allocated to different DeFi platforms to generate a yield. To offset against potential risks, SwissBorg established a Safety Net program.

The Safety Net program holds approximately 18M CHSB, which will be used in the event of a loss in the Smart Yield wallets.

How it works

In case of force majeure events that can lead to the loss of funds, SwissBorg will compensate the losses using the funds from the Safety Net. 

If the Safety Net is insufficient, we will deduct the resulting fund's loss to the users who hold a balance in the yield wallets that experienced the loss.

Deduction calculation:

The deduction is based on the proportional ratio of current holdings in the Smart Yield program in the affected currency:

User_ratio_holding_affected_currency = (balance in the Yield program in the affected currency for this user / the sum of balances in the Yield program in the affected currency for all users)

User_deduction = User_ratio_holding_affected_currency * amount lost

 
If the deduction is not 0 (the user currently has holdings in the affected currency), a yield loss transaction subtracting the amount from his yield account in that currency will appear in the app. The deduction should take effect at the next cutoff.

To handle this deduction, we will block all movements associated with that specific Yield (no other Yield wallet will be affected) and we will cancel already scheduled subscriptions and redemptions.

Important note! The CHSB Yield Program does not have a Safety Net because all the funds are located inside the SwissBorg ecosystem and therefore not exposed to the DeFi platform's investment risks.