How the Re Protocol Works
The Re Protocol channels on‑chain capital into real‑world reinsurance treaties through a fully transparent, blockchain‑native workflow. Particip
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 returns backed by reinsurance contracts — with every dollar of collateral visible on-chain or attested daily via Chainlink.
1. Capital Staking & Tokenization
Deposit
Users stake accepted assets (e.g., USDC, USDe, sUSDe) into the Insurance Capital Layer (ICL) smart contracts.
—
Mint
The ICL mints either reUSD (senior tranche) or reUSDe (junior tranche).
Tokens 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
Yield Model (Both Tokens)
Both reUSD and reUSDe earn a blended yield from two sources:
Off-protocol capital (deployed to the reinsurance company) → SOFR rate
On-chain capital (idle within the protocol) → 7-day trailing average sUSDe basis trade rate
Final yield = weighted average of both rates + token-specific spread.
reUSD
+250 bps
Senior
Instant (when available)
reUSDe
+850 bps
Junior
Quarterly windows
Prices update daily at UTC 00:00 via an on-chain feed, with guardrails on maximum daily price-step size.
2. Capital Stack & Loss Protection
The protocol uses a layered capital structure:
Reinsurance company equity — the reinsurer's own funds absorb losses first, sitting junior to all protocol capital.
reUSDe (junior tranche) — next to absorb losses. Higher spread compensates for this risk.
reUSD (senior tranche) — most protected layer.
3. 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 for 24/7 proof of funds.
4. Liquidity & Redemption
reUSD
Up to an actuarially set % of NAV
Queue/Window mode when instant is depleted
On-chain idle cash → matured trust assets
reUSDe
—
Quarterly (request window, pro-rata fill)
Surplus released by actuary + idle sUSDe earnings
Unfilled requests auto-roll to the next window and continue to earn yield until settled.
Submit redemptions at app.re.xyz/redeem.
Monitor capacity at app.re.xyz/transparency.
5. 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 (Certora, Hacken).
Fireblocks policies: Multisig approvals and whitelisted addresses mitigate operational risk.
KYC/KYB controls: Minting and redemption are permissioned for verified users only.
Daily reserve verification: Off-chain balances attested by The Network Firm and published via Chainlink.
6. Participant Benefits
Access — Enter a once-institution-only asset class.
Yield choices — Pick between stable reUSD or higher-yield reUSDe based on risk appetite.
Capital protection — Reinsurer equity and layered tranches protect participants.
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.
ants 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
Deposit
Users stake admitted assets (e.g., USDC) into the Insurance Capital Layer (ICL) smart contracts.
—
Mint
The ICL mints either reUSD, the, low‑volatility token, or reUSDe, the junior tranche token.
reUSD / reUSDe appear in the user’s wallet
Custody
Idle funds are held in a Fireblocks vault under multisig. Any assets moved to offchain accounts are published daily to a Chainlink oracle.
Proof‑of‑reserves, publicly auditable
reUSD Yield Path
The base rate reflects a weighted average of yields across deployed capital (earning the risk-free rate) and undeployed capital (earning the Ethena basis trade), with an additional 250 bps spread applied.
Price is updated every UTC day at 00:00 via an on‑chain feed, with guardrails on maximum daily price-step size.
reUSDe Yield Path
7‑day avg. Secured Overnight Financing Rate (SOFR) + 850 bps (risk‑free floor)
Price is updated every UTC day at 00:00 via an on‑chain feed, with guardrails on maximum daily price-step size.
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
reUSD
Up to an actuarially‑set percentage of NAV
Queue/Window mode when instant is depleted
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. Redemption and transaction fees currently start at 6 bps (0.06%).
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.
KYC/KYB Controls – Minting and redemption are permissioned for verified users only.
Third-Party Reserve Verification – Off-chain balances are attested daily by The Network Firm and published via Chainlink.
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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