Protocol Stability and Risk Management

CosmBank Flexi Loan is engineered to maximize borrower flexibility while maintaining uncompromised protocol solvency.

Overcollateralization Design

  • Every loan maintains a collateralization ratio significantly above 100% (e.g., 120% minimum).

  • Even in adverse conditions, the protocol always retains more collateral value than outstanding loan exposure.

  • This guarantees that no bad debt accumulates within the system.

Treasury Reserve Backstop

  • In extreme scenarios (e.g., unexpected mass defaults or market disruptions), CosmBank can deploy its Treasury reserves to repurchase outstanding debt on the open market if necessary.

  • This acts as a final stabilizing buffer to protect long-term protocol health.

DAO Governance Control

  • All critical lending parameters — such as:

    • Loan-to-value ratios

    • Fixed interest rates

    • Maturity options

are governed by veCSM holders through transparent on-chain voting.

  • This ensures that parameter adjustments evolve with ecosystem needs, without unilateral control by developers or centralized actors.

CosmBank Flexi Loan combines automated risk isolation with DAO-controlled adaptability — achieving a self-sustaining and future-proof lending ecosystem.

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