# Rebalancing and the retirement process

How does Balanced guarantee the price of its assets? No matter the price elsewhere, you can always sell them on Balanced for their true value. Let’s explore how this works.

At the time of writing, there’s a 5% “fee” or premium on the retirement price of sICX. That means if the sICX/bnUSD price is >5% higher than the actual value of ICX, you’d sell sICX for bnUSD, then retire the bnUSD for $0.95 of sICX collateral. You’ll end up with more sICX than you started with, and the bnUSD is burned, removing it from circulation.

When a retirement occurs, a group of 60 borrowers have their position “rebalanced”: their debt is reduced, and an equivalent amount of collateral sold.

How much will each person be rebalanced by? It depends on their percentage of debt within the group, and the amount of bnUSD being retired.

For example:

Bob buys 1,000 bnUSD for 900 sICX, then retires the bnUSD.

The group of borrowers to be rebalanced have a combined debt of 1,000,000 bnUSD.

Alice is one of the borrowers, with a loan of 10,000 bnUSD (1% of the group’s debt). When the retirement happens, Alice’s debt is reduced by 10 bnUSD, and $9.50 of her collateral is sold to Bob. The amount will be displayed to Alice in the position details section.

Bob receives 950 sICX, a profit of 50 sICX.

Because of the 5% premium, retirements should only occur when the sICX/bnUSD price is at least 5% higher than the actual value of ICX.

To minimize the impact on borrowers, a group’s debt can be rebalanced by a maximum of 0.1% each time: if the group had a combined debt of 1,000,000 bnUSD, only 1,000 bnUSD could be retired in one transaction. And after being rebalanced, every other borrower will take a turn before it happens again.

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