Re offers two options built for different risk profiles:
→ reUSD: for holders who prioritize liquidity and senior protection
→ reUSDe: for holders willing to absorb losses before reUSD, but only after Re's own capital, in exchange for more yield
Both sit above Re's first-loss capital, so Re takes losses before either token does.
Both earn yield the same way: a base rate plus a spread funded by reinsurance activity. Where a token sits in the capital stack, and how liquid it is, sets the size of its spread.
reUSD sits at the top of the stack. Its yield blends SOFR for offchain capital with the onchain buffer's sUSDe rate, each plus a smaller spread that reflects its position behind both Re's capital and reUSDe.
reUSDe sits mezzanine, between Re's first-loss capital and reUSD. It redeems in quarterly windows and covers losses that exceed Re's capital before they reach reUSD, so it carries a substantially larger spread and a higher yield.
Castle Labs illustrates both side by side in their latest analysis:
#reinsurance #RWA #defi
More of the report: research.castlelabs.io/p/re-and-the-case-for-reinsurance-yield
→ reUSD: for holders who prioritize liquidity and senior protection
→ reUSDe: for holders willing to absorb losses before reUSD, but only after Re's own capital, in exchange for more yield
Both sit above Re's first-loss capital, so Re takes losses before either token does.
Both earn yield the same way: a base rate plus a spread funded by reinsurance activity. Where a token sits in the capital stack, and how liquid it is, sets the size of its spread.
reUSD sits at the top of the stack. Its yield blends SOFR for offchain capital with the onchain buffer's sUSDe rate, each plus a smaller spread that reflects its position behind both Re's capital and reUSDe.
reUSDe sits mezzanine, between Re's first-loss capital and reUSD. It redeems in quarterly windows and covers losses that exceed Re's capital before they reach reUSD, so it carries a substantially larger spread and a higher yield.
Castle Labs illustrates both side by side in their latest analysis:
#reinsurance #RWA #defi
More of the report: research.castlelabs.io/p/re-and-the-case-for-reinsurance-yield
