> For the complete documentation index, see [llms.txt](https://re0-2.gitbook.io/re-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://re0-2.gitbook.io/re-protocol/getting-started-with-re/introduction-to-the-re-protocol.md).

# Introduction to the Re Protocol

Re Protocol bridges decentralized finance and the global reinsurance market. Built on blockchain technology, it brings transparency, efficiency, and accessibility to a multi-trillion-dollar industry that has historically been opaque and intermediary-heavy.

### How It Works

Re Protocol facilitates direct capital allocation to reinsurance contracts through a network of smart contracts and a layered capital architecture. Participants deposit stablecoins, receive yield-bearing tokens, and earn returns derived from both on-chain DeFi strategies and off-chain reinsurance deployments.

Deposited assets are swept daily to a Fireblocks custody vault. When a licensed reinsurer draws on a Surplus Note, capital moves to the reinsurance counterparty. Off-chain assets (whether in a reinsurance contract or a regulated §114 trust account) are reported on-chain daily via third-party verification through Chainlink.

As reinsurance contracts mature and the actuarial team releases capital, liquidity flows back to the protocol — supporting redemptions for reUSD and contributing to yield accrual for both tokens.

### Two Ways to Participate

Re Protocol offers two yield tokens, each representing a different position in the capital stack:

* **Basis-Plus (reUSD)** — the senior tranche. Earns a blended yield (SOFR + sUSDe weighted average) plus a 250 bps spread. More liquid, with instant redemptions when capacity is available.
* **Insurance Alpha (reUSDe)** — the junior tranche. Earns the same blended yield plus an 850 bps spread, in exchange for absorbing losses before the senior layer. Redeemable quarterly.

Both tracks provide exposure to reinsurance-backed returns. Choose based on your preferred risk/return profile.

### Layered Capital Protection

The protocol's capital stack provides multiple layers of protection:

1. **Reinsurance company equity** sits junior to all protocol capital — the reinsurance partner's own funds absorb losses first.
2. **reUSDe** acts as the next buffer, absorbing losses after the reinsurer's equity.
3. **reUSD** is the most senior layer, protected by both layers below it.

### Key Features

* **Tokenized access to reinsurance:** reUSD and reUSDe tokens give participants simple, liquid exposure to reinsurance-backed returns.
* **Transparent by design:** Every dollar of collateral and every premium payment is visible on-chain or attested daily via Chainlink.
* **Strategic partnership:** Re Protocol operates in partnership with [CoverRe.com](https://coverre.com), a Cayman-based licensed reinsurer, ensuring regulatory compliance and operational expertise.
* **On-chain composability:** Use tokens as collateral in Curve, Pendle, Morpho, and other DeFi venues.

By combining blockchain transparency with the stability of the reinsurance market, Re Protocol opens a once-institutional asset class to a broader set of participants.