We are committed to being the simplest and safest way to earn with DeFi. Like all digital assets, funds on Donut are not FDIC insured, therefore not zero-risk. Your funds on Donut Build, however, are secured with eight key measures:

  • Coverage Protection: Our trusted lending partners require that all loans are collateralized by over 125%. This protects your principal and interest earned in case of borrower default. If the value of the collateral falls, borrowers are margin called and required to top up or repay part of their loan. If not, they are automatically liquidated, which protects your principal.

  • Diversification: Build generates returns from Yearn (Compound, Aave, dydx, Alpha Hormona) and Institutional Borrowers. We balance your funds across these partners with a target ratio of 50% per lending partner. When demand for borrowing falls with one lender, we rebalance the distribution to maintain your APY. This diversification insulates you from market volatility and protects your base APY.

  • Custody Protection: Your funds are securely lent to prime brokers and lenders who manage over $10 billion in digital assets via our wallet partner, Fireblocks, which stores over $400 billion in digital assets.

  • Peg Stability Module: DAI, the stablecoin used on Build, has a Peg Stability Module to ensure the strength of its peg and that it can always return the price to the peg if it ever deviates.

  • Smart Contract Audits: Funds on Yearn are protected by regular smart contract audits administered by multiple independent third-party firms.

  • Data Security: We encrypt user data using the AES-256 standard. The AES-256 is bank-grade encryption and the industry standard for protecting data.

  • Account Protection: All accounts are protected with a PIN number and two-factor authentication (2FA).

  • Compliance: Donut is a FinCEN registered organization. FinCEN requires renewal every two years and safeguards the financial system from illicit use.

To learn more about the risks of investing on Build, click here.

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