# How Normal Treats Your Funds Normal is built on transparency and security. Understanding how your funds are managed, where they're stored, and how they're protected is essential to building trust in the protocol. #### **Your Funds Stay On-Chain** Every transaction, every deposit, and every asset you hold through Normal is settled on the Stellar blockchain. Nothing is held off-chain. Nothing is hidden. **What this means:** * Your holdings are verifiable on the Stellar network at any time * You can independently audit your positions using Stellar block explorers * Normal cannot restrict access to your on-chain assets If you supply USDC to your savings account, the underlying funds and the vault tokens that represent your share both live on Stellar, not in a database controlled by Normal. #### **Non-Custodial by Design** Normal does not take custody of your assets. When you supply USDC to savings, you're interacting with audited smart contracts on Stellar, not handing funds over to Normal to manage on your behalf. **How it works:** * You initiate every action through the Normal interface * Smart contracts execute the deposit, withdrawal, or swap on-chain * Vault tokens representing your savings position are minted directly to your wallet * You maintain ownership throughout the entire process Normal cannot freeze, seize, or restrict your funds. The protocol facilitates transactions, but you control the assets. #### **Collateralization and Security** Your supplied USDC earns yield through Blend Capital's over-collateralized lending pools. Every dollar you lend is backed by more than a dollar of collateral posted by borrowers. #### **What protects your funds:** * Borrowers must post collateral worth more than they borrow * Automatic liquidations protect lenders if a position becomes under-collateralized * Backstop reserves act as first-loss capital that absorbs defaults before they reach you * Isolated lending pools prevent risk in one pool from affecting others This layered design means your savings are protected by both the borrower's collateral and the backstop, with Stellar's blockchain providing the immutable settlement layer beneath everything. #### **Wallet Options Don't Change Fund Management** Whether you create a new wallet through Normal, connect an existing wallet, or import a wallet with your seed phrase, your funds are still managed the same way: * Your assets are held in your own Stellar wallet * All transactions execute through audited smart contracts * Your USDC supplies into the same Blend pools regardless of wallet method The wallet option you choose only affects how you sign in. It doesn't change how your funds move through the protocol. #### **Audits and Transparency** Normal's smart contracts and infrastructure have been audited by Halborn, a leading blockchain security firm. The underlying protocols (DeFindex and Blend Capital) have also undergone independent audits. These audits ensure the protocol functions as intended and that your funds are protected against known vulnerabilities. You can review the audit reports and verify the smart contract code yourself. Everything is public. Visit [Security Audit](/normal/getting-started/protocol-and-security/security-audit.md) for more information. #### **What Normal Cannot Do** To be clear, Normal cannot: * Access your funds without your wallet signature * Reverse transactions once they're confirmed on-chain * Freeze or seize your assets * Change the terms of your savings position after it's created * Prevent you from withdrawing The protocol is designed to remove trust from the equation. You interact with code, not intermediaries. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://normalfi.gitbook.io/normal/getting-started/protocol-and-security/how-normal-treats-your-funds.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.