How Safe is Rand?
Rand Network helps people pay for all their monthly expenses in one place. Your savings are secure because Rand is built on blockchain and earns yield through stable coins. Stable coins are designed to hold their value by being pegged to a nearly 1:1 FIAT ratio. Rand invests these stablecoins in automated on-chain structured products that produce high yields, keeping you invested and earning.
Rand Network has been designed with security as our #1 priority, both in our choice of stable coins, and also in our mission to mitigate any loss of capital that happens as a result of events outside our control. All our smart contracts are audited by first-class certified cybersecurity consulting companies to ensure code security and to test the resilience of our smart contract architecture to outside attacks and/or its code design. Rand is also subject to financial regulatory approval for its Rand token (RND).
Our built-in security mechanism is called the Safety Module (SM). Let’s go into more detail about its features, how it works, why it protects our community and how it rewards RND token holders.
Rand powered by security
Firstly, the Safety Module protects our users from loss of funds stemming from shortfall events beyond our control. These can either be smart contract risks (a bug or attack surfaces on the smart contract layer), or liquidation risks (the failure of an asset being used as collateral in yield strategies). In either of these events, Rand would take funds from our external insurance to cover any loss of capital.
If our external insurance did not cover these deficits in full, Rand’s treasury would collateralize a loan to cover the loss of funds and this would be repaid over time. If Rand’s treasury loan was still not enough to cover the loss of capital, we would collateralize an additional loan using the staked funds that are locked within the Safety Module. In this way the Safety Module acts as a lender of last resort by using the funds staked within it to protect assets within our network.
In an extreme case where the steps above were still not enough to cover the total loss of capital, Rand would issue RND tokens to be batch auctioned as part of an ad-hoc Recovery issuance which would be approved by community governance, in order to cover the total loss of capital as a result of either of these types of shortfall events.
Rand incentivizes its token holders through its system of safety rewards which come from the profits we produce within the yield aggregator. To secure the protocol and receive incentives, RND holders stake their tokens within the Safety Module. These staked positions are redeemable at any time, subject to a seven day cooling down period.
These safety incentive rewards are continually allocated from the fees generated by the protocol to users participating in the Safety Module and can be withdrawn subject to the same standard cooling down period. This reward plan for Safety Incentives is designed to encourage our community to invest in the Safety Module and the network’s security through staking their RND tokens to earn more rewards.
Before we distribute yields we earn from the yield aggregator, we set aside a portion of every vault’s yield to be deposited in the Safety Module to fund security. These funds are then invested separately in a Balancer/Aave pool to produce yield and the Safety Module receives balancer pool tokens in return. In this way we balance out the Safety Module by holding tokens other than RND and we can intervene to protect our users whatever happens.
Rand rewards our users through vault yields and exclusive community giveaways. But, we also look after the network and its users by sending a proportion of Rand’s treasury fees to the Safety Module which is invested to generate additional yield for our token holders and the safety module itself. This means should the safety module not be needed, it will redistribute a portion of its yield to users at regular intervals as part of vault rewards and to our token holders as part of safety rewards.
Rand rewards our community
The Rand community gets to participate in the network’s governance and share in growing vault yields by staking their RND tokens within the network. In this way Rand Network incentivizes security through community rewards and also keeps users’ funds secure, so you can keep investing and earning. Whatever the future may bring, we are prepared to keep the network safe.