# Stability Pool

## Stability Pool overview

The Stability Pool is an efficient solution for removing under-collateralized debt from the BSD protocol. The pool provides upfront liquidity to repay debt from liquidated vaults—ensuring that the total BSD supply always remains over collateralized.

When any vault is liquidated, an amount of BSD corresponding to the remaining debt of the vault is burned from the Stability Pool’s balance to repay its debt. In exchange, the entire collateral from the vault is transferred to the Stability Pool.

## Stability Pool FAQs <a href="#stability" id="stability"></a>

### **What is the Stability Pool?**&#x20;

The Stability Pool provides the upfront liquidity needed to repay the debt from liquidated vaults, ensuring that the total supply of BSD always remains over-collateralized. When a vault is liquidated, an amount of BSD from the pool is burned to cover the vault's debt, and in exchange, the vault's sBTC collateral is transferred to the pool.

### **How do I benefit as a Stability Provider?**&#x20;

As a Stability Provider, you deposit BSD into the Stability Pool. When vaults are liquidated (typically just below a 110% collateral ratio), your BSD is used to repay their debt, and you receive a pro-rata share of their sBTC collateral—usually worth more than the BSD burned.

Over time, your BSD balance in the pool decreases, but your sBTC rewards grow. The more BSD you deposit and the longer you remain in the pool, the greater your share of liquidated collateral.

### **Is there a minimum deposit?**&#x20;

Yes, 1000 BSD is the minimum deposit and balance required for each stability provider.

### **When can I withdraw?**&#x20;

You can withdraw your deposited BSD or earned sBTC rewards from the Stability Pool at any time. There is no minimum lockup duration.&#x20;

### **Can I lose money by depositing to the Stability Pool?**&#x20;

While liquidations typically occur when a vault's collateral ratio is between 100% and 110%, it is theoretically possible for a vault to be liquidated below a 100% ratio during extreme events like a flash crash, oracle failure, or another unforeseen condition. In such a case, you may experience a net loss in dollar terms.

### **What happens if the Stability Pool is empty when liquidations occur?**&#x20;

If the Stability Pool is empty, the system uses a secondary liquidation mechanism called Redistribution. In this situation, the system redistributes the debt and collateral from liquidated vaults to all other existing vaults in the protocol.


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