Risk Management Mechanism

In addition to technical security measures, the WorldBank Protocol also incorporates systematic risk management:

1. Collateralization Risk Control

• wUSD will initially be an over-collateralized stablecoin.

• The system monitors fluctuations in the value of collateralized assets and triggers an automatic liquidation mechanism.

2. Diversified Return Allocation

• Diversified funds (Pendle, Ethena, RWA Treasury bonds, etc.)

• Avoid single-channel risk.

3. Risk Buffer Fund

• A 5% risk buffer is allocated from returns to fund risk mitigation.

• This is used to mitigate extreme market volatility and black swan events.

4. Compliance Risk Management

• Partner with licensed securities firms/custodians to mitigate regulatory risks.

• KYC/AML modules are reserved for compliant integration.