The Re protocol is a decentralized reinsurance platform that bridges the reinsurance market with blockchain technology. This enables transparent, secure, and composable access to institutional grade risk and yield. By channeling onchain capital into fully collateralized reinsurance contracts, Re allows participants to earn returns previously accessible mainly to large institutional allocators. Every dollar of collateral, premium, and yield is tracked onchain, creating the means for how capital can support insurance risk and be rewarded for doing so.
At the heart of the protocol are insurance capital layers (ICLs), which are dedicated smart contract vaults that receive user deposits and allocate that capital into reinsurance risk pools. When users stake approved stablecoins into an ICL, they receive a corresponding tokenized position (either reUSD or reUSDe) depending on the risk return profile selected. These tokens represent slices of the reinsurance capital stack and provide different exposures to yield and underwriting outcomes.
reUSD: Predictable Yield
reUSD is the stable core of the Re protocol. It is built for people who want steady, onchain yield without taking on the ups and downs of underwriting reinsurance risk. When someone holds reUSD, their principal is protected, and the value of their position grows a little bit every day as yield accrues. This is a modern, onchain version of a money market fund, but plugged into real reinsurance activity and updated on the blockchain to ensure transparency.
The way reUSD generates yield is designed to be both competitive and predictable. Each day, the protocol looks at two reference points: the short term risk free rate, and the yield available from a conservative Ethena basis trade. It then takes whichever of those is higher and adds a 2.5% margin on top. That rate becomes the basis for reUSD’s daily accrual. Instead of minting more tokens, reUSD reflects this return through an increasing token price, and that price is published onchain. This means holders see their reUSD become more valuable over time.
Behind the scenes, user deposits flow into ICLs, which allocate a portion of the pool into a regulated §114 reinsurance trust account that supports real insurance contracts with partner reinsurers. That trust issues surplus notes that lock in principal protection and interest at the appropriate rate. Collateral is held with professional custodians, and additional safeguards such as multisignature controls and third-party reporting help ensure that funds are managed securely and as intended.
Liquidity for reUSD is handled through a mix of onchain buffers and scheduled redemption windows, which are aligned with how capital moves in and out of reinsurance structures. Holders can redeem into underlying assets, such as USDC or short term U.S. Treasuries, within those parameters. Taken together, these design choices make reUSD a strong fit for users who want capital preservation and a reliable, dollar denominated yield that can slot easily into DeFi strategies or treasury management. It aims to offer the familiarity of a low risk yield product from traditional finance, with the transparency and composability of being onchain.
reUSDe: First-Loss Exposure
In contrast, reUSDe serves as the performance token of the Re protocol, described as the “Insurance Alpha.” It is designed for investors willing to absorb first-loss risk across the reinsurance portfolio in exchange for a share of underwriting profits, which have historically translated to net annual returns. Instead of principal protection, reUSDe holders act as junior capital within the capital stack, covering claims shortfalls before other layers are impacted.
This first-loss role gives reUSDe holders direct participation in the profit of deployed capital. After claims, underwriting fees, and operational costs are paid, reUSD accruals are satisfied first, and then surplus profits are credited to reUSDe holders according to a target return range. The token’s price compounds daily around a quarterly refreshed target net asset value (tNAV).
Users mint reUSDe by depositing reUSD into the reUSDe contract, funds are then transferred into the relevant ICL and then into the §114 trust as junior surplus capital. In downside scenarios where portfolio losses exceed the senior buffer, trust assets are used to cover claims, reducing tNAV accordingly. Even while idle, undeployed reUSDe capital earns yield from Ethena’s sUSDe rate, ensuring that all capital remains productive.
Because reUSDe combines higher potential upside with direct loss exposure and structured redemption windows, it is more suitable for experienced investors who are comfortable with underwriting dynamics and some liquidity constraints. reUSDe offers the opportunity for enhanced returns at the cost of elevated risk, playing a differentiated role within a balanced capital allocation strategy.
Comparing the Two Tokens
While both reUSD and reUSDe unlock capital market access to the reinsurance sector, they do so with fundamentally different risk return profiles. They are designed to sit in different parts of the capital stack and to serve different types of users, rather than to compete with one another.
reUSD emphasizes capital preservation, predictable yield, and broad applicability, making it a good choice for conservative allocators and those seeking a stable, principal protected digital dollar exposure with yield that often exceeds conventional money market alternatives. On the other hand reUSDe embraces first-loss exposure in exchange for a share of underwriting profits, aligning with investors targeting higher potential returns and comfortable with active insurance risk participation.
Together, these tokens complement one another within the Re’s capital stack, offering clear options across a spectrum of investor preferences and reinforcing the protocol’s mission to democratize access to real world reinsurance yield through blockchain innovation. The price and supply for reUSD and reUSDe can be tracked on Re’s transparency dashboard.
Many users may choose to treat reUSD as their primary, lower volatility exposure and selectively allocate a smaller portion to reUSDe as a higher position. This ability to combine the two in different proportions allows portfolios to be tailored to individual risk appetite, time horizon, and liquidity needs, all within a single unified ecosystem.