How the Re Protocol Work
The Re Protocol channels on‑chain capital into real‑world reinsurance treaties through a fully transparent, blockchain‑native workflow. Participants stake stablecoins, receive yield‑bearing tokens, and earn diversified insurance returns — all while every dollar of collateral and every premium payment is visible on‑chain.
1. Capital Staking & Tokenization
Step
What happens
Resulting Token
Deposit
Users stake admitted assets (e.g., USDC) into the Insurance Capital Layer (ICL) smart contracts.
—
Mint
The ICL mints either:• reUSD – principal‑protected, low‑volatility token.• reUSDe – profit‑sharing, first‑loss token.
reUSD / reUSDe appear in the user’s wallet
Custody
Idle funds are held in a Fireblocks vault under multisig. Balances are published daily to a Chainlink oracle.
Proof‑of‑reserves, publicly auditable
reUSD Yield Path
Daily price increases track the higher of:
7‑day avg. SOFR + 250 bps (risk‑free floor)
Ethena sUSDe basis yield Price is updated every UTC day at 00:00 via an on‑chain feed.
reUSDe Yield Path
Holders absorb portfolio losses and capture surplus profits, historically 16 – 25 % IRR net of underwriting & ops fees. A Target NAV (tNAV) is struck quarterly; price auto‑compounds daily toward that tNAV. Idle, undeployed reUSDe capital earns the sUSDe rate.
2. Intelligent Deployment via Surplus Notes
Vetted Reinsurer : Each cedent passes KYB/AML, rating, and underwriting due‑diligence screens.
Surplus Note : The ICL lends capital under a legally binding Surplus Note, ranking junior to policyholders.
§114 Trust Account : Drawn funds move off‑chain into a U.S.‑domiciled trust bank, providing admitted collateral for the reinsurer’s policies.
On‑Chain Mirror : Trust balances, premium inflows, and claim outflows are hashed and pushed to Chainlink, giving 24/7 proof of funds.
3. Liquidity & Redemption Logic
Token
Instant Buffer
Scheduled Window
Source of Liquidity
reUSD
Up to an actuarially‑set percentage of NAV
Daily, Then Quarterly
On‑chain idle cash → matured trust assets
reUSDe
—
Quarterly (request window, pro‑rata fill)
Surplus released by actuary + idle sUSDe earnings
Any unfilled request auto‑rolls to the next window and continues to earn yield until settled.
4. Transparency & Risk Management
Chainlink Oracles : Publish price feeds, trust balances, surplus‑note schedules, and redemption queues.
Actuarial Analysis : Signs off on loss reserves and surplus release cadence.
Smart‑Contract Audits – All ICL, token, and oracle contracts undergo regular third‑party audits.
Fireblocks Policies – Multisig approvals and whitelisted addresses mitigate operational risk.
5. Participant Benefits
Access – Enter a once‑institution‑only asset class.
Yield Choices – Pick between stable reUSD or higher‑beta reUSDe according to risk appetite.
Composability – Use tokens as collateral in Curve, Pendle, Morpho, or other DeFi venues.
Real‑Time Data – Monitor portfolio balances and collateral 24/7 on‑chain.
Re Protocol bridges DeFi capital and global reinsurance, offering transparent, collateral‑backed yields while strengthening the resilience of insurers worldwide.
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