How Does Re Work?

Re connects DeFi capital with traditional reinsurance markets, allowing on-chain depositors to provide reinsurance capacity to licensed insurers via treaty placements and binder arrangements

On-chain reinsurance capital pooling is a first-of-its-kind mechanism bridging $600B+ traditional reinsurance market with DeFi. Novel but introduces complex regulatory and actuarial risks.

Re collects premiums from partner insurers ($191M+ written premiums in 2025) and distributes yields to on-chain capital providers, targeting a 92% combined ratio

On-chain premium distribution from off-chain insurance contracts creates a novel yield mechanism uncorrelated with crypto markets. Combined ratio of 92% indicates profitable underwriting.

USDRE is a stable token issued to depositors in exchange for USDC within the insurance capital layer, representing their share of the reinsurance capital pool

Receipt token mechanism is standard. USDRE's value depends on the underlying reinsurance pool performance — catastrophic losses could impair its peg.

ReToken is an ERC20 governance token used for voting on capital deployment decisions, partner onboarding, and protocol parameters. Confirmed governance-only with fixed 1B supply and no protocol revenue claim.

Governance-only token with no fee capture or revenue claim. Fixed 1B supply with 50% ecosystem allocation. Capital deployment decisions via governance create meaningful real-world consequences.

Chainlink Proof of Reserve integration provides transparent verification of on-chain capital reserves backing reinsurance commitments

Standard Chainlink PoR implementation. Important for transparency but only verifies on-chain reserves, not off-chain premium collection or claims status.

Re underwrites across multiple insurance lines including commercial auto, property, and workers' compensation, diversifying risk exposure across uncorrelated insurance categories

Multi-line reinsurance diversification on-chain is novel. Diversification reduces concentration risk but requires actuarial expertise that may be difficult to govern via token voting.

Re is deployed across Avalanche, Base, Arbitrum, and Ethereum, with cross-chain bridging via Chainlink CCIP (migrated from LayerZero in May 2026)

CCIP migration (May 2026) improved bridge security with 16 independent DON node operators per lane and native rate-limit circuit breakers. Fundamental multi-chain risk remains but execution risk reduced.

A major natural disaster or catastrophic event could trigger simultaneous claims across multiple insurance lines. On-chain capital pool may be insufficient to cover concentrated losses, causing USDRE impairment and depositor losses. Traditional reinsurance has retrocession layers; Re's on-chain pool is more concentrated.

Hacken audit identified centralized minting to a single address. Protocol has since moved to MPC multi-signature wallets per documentation, but no new audit confirming complete remediation has been published. Residual key management risk remains.

Premium yields depend on off-chain insurer partners making timely payments. Insurer defaults, disputes over coverage terms, or delayed premium payments create cash flow uncertainty for on-chain depositors who expect predictable yields.

Deployment across four chains creates fragmented capital that must maintain consistent reserve ratios. Migration to Chainlink CCIP (May 2026) reduced execution risk, but a chain-specific issue could still create temporary reserve imbalances between deployments.

Token governance directing reinsurance capital allocation requires actuarial expertise that token holders may lack. Poor capital allocation decisions could expose the pool to underpriced risk, where premiums collected are insufficient to cover eventual claims.