Inside Re’s Capital Stack: How reUSD and reUSDe Unlock Insurance Yield

The Re protocol is a decentralized reinsurance platform that connects the reinsurance market with onchain finance. This enables transparent, secure, and composable access to institutional-grade risk and yield. By channeling onchain capital into collateralized reinsurance contracts, Re allows participants to earn reinsurance yield previously accessible mainly to large institutional allocators.

When users stake approved stablecoins into Re, they mint a corresponding tokenized position (either reUSD or reUSDe) depending on the token selected. These tokens represent slices of the reinsurance capital stack.

reUSD: Senior Layer Token

reUSD is Re Protocol's senior tranche token, a yield-accruing token built for stable, low-volatility returns. It sits at the top of the capital stack and is shielded from loss by the layers beneath it. In exchange for that protection, it earns less than reUSDe.

A portion of reUSD remains onchain to fund redemptions. The remainder is deployed offchain to serve as collateral that backs reinsurance treaties.

reUSD accrues a blended yield based on how protocol capital is deployed: offchain capital (funding the reinsurer) earns the risk-free rate (SOFR) plus 2.5%, whereas onchain capital (held within the protocol) earns the 7-day trailing average of the sUSDe yield rate plus 2.5%.

That rate is 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.

reUSD is designed as a highly liquid instrument. Redemptions are instant as long as the redemption buffer remains in excess of 1%. Taken together, these design choices make reUSD a strong fit for users who prioritize capital preservation and seek an instrument 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: Mezzanine Layer Token

reUSDe is Re Protocol's mezzanine tranche token that sits between the reinsurer's equity and the senior reUSD tranche. reUSDe earns a significantly higher yield than reUSD in exchange for accepting significantly lesser liquidity; whereas reUSD redemptions are typically instant, reUSDe redemptions are planned quarterly. Before each redemption window, Re’s independent actuary determines how much surplus capital can be released from active treaties and trust accounts. That amount is also governed by regulatory requirements, and collateral cannot be released without regulatory approval. The released surplus funds the redemption pool for that window, which is the amount available to pay out.

reUSDe is meant to be ultimately deployed nearly in its entirety as collateral to back reinsurance treaties. It earns the risk-free rate (SOFR) plus an 8.5% spread.

Because reUSDe combines higher potential upside with lesser liquidity, it is more suitable for experienced investors who are comfortable with some liquidity constraints.

Comparing the Two Tokens

While both reUSD and reUSDe unlock capital market access to the reinsurance sector, they do so with fundamentally different 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.

Together, the 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. A full suite of metrics on both tokens can be viewed on the Re App.