Risk Framework

With billions of locked assets, Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) have boomed in recent years. Bend Protocol launched on the Rinkeby in January 2022, now among the top NFT lending markets for depositors and borrowers.

The industry has been forming various standards to manage the emerging risks related to the hyper-connected ecosystem. Bend holds security at its core with audits by CertiK as detailed in Security & Audits.

The following documentation analyses the fundamental risks of the protocol and describes the processes in place to mitigate them. A Bend Market Risk Assessment has been produced by the quantitative modeling team of Bend. Bend and the Safety Module have been stress tested via agent-based simulation. The simulations show that the model can remain solvent under extreme market conditions, exhibiting proper risk management. As a result, Bend provided some parameter suggestions to reduce insolvency risk further.

If you have any questions, join us on Discord; our team and community members look forward to helping you understand Bend's risks and risk management procedures.