# What is the Re Protocol? By [kys1mo](https://paragraph.com/@kys1mo) · 2025-09-24 --- Re Protocol is a platform for bringing reinsurance into DeFi transparently and efficiently. Reinsurance (insurance for insurers) is typically a large, opaque business consisting of many layers of intermediaries. Re Protocol offers a solution using blockchain smart contracts that allows average users a way to engage with reinsurance—earning returns from underwriting without the need for the large capital requirements, and heavy operational infrastructure. * * * Here’s how it works in broad strokes ------------------------------------ * * * Insurance Capital Layers (ICLs): These are pools of capital that support reinsurance contracts at the time of inception when enough capital has been collected. The Re Protocol enters into surplus note agreements with a licensed reinsurer once enough capital has been accumulated (from different ICLs such as re USD and re USD). There are two areas for participants / risk profiles: Insurance Alpha (re USD): Higher risk, higher potential for return. This area captures the higher underwriting spread (about 15‐23 %) that comes from having real insurance programs. Basis-Plus (re USD): Less volatility. This area utilizes more stable assets (i.e. T-bills) plus a spread (≈ 6-9+ % net return). This is an option if one would prefer a steadier yield over taking on risk. Transparency & Security: The assets staked by users will be swept on a daily basis to secure vaults (e.g. Fireblocks). Whenever needed, the collateral will be migrated on-chain to the re insurer. If off-ramped, or reinsurance contracts, will be reported via third-party verification, and through oracles like Chainlink. Governance & Growth: Initially they have partnered with a licensed re insurer (Cover Re in the Cayman Islands), however the goal is to decentralize over time. The expectation is that, over time, governance will transition to a DAO model, with more say from the community. * * * How to Get Started (QuickStart) ------------------------------- * * * If you want to engage yourself in Re Protocol, these are the practical steps to get started. You can think of this as what you will need to do with your wallet, tokens, and so forth. 1. **Access the Platform** Visit [re.xyz](http://re.xyz). Once you are on the platform, select your method of participation: the "Basis-Plus" track (for reUSD) or "Insurance Alpha" (for reUSDe). 2. **Connect The Wallet** Connect a compatible wallet (for example, MetaMask, etc.). You will need an email and to accept the terms of service with the platform. You also want to ensure your wallet has approved tokens available such as USDC, DAI, USDe, or sUSDe, as these are the tokens you will stake. 3. **Stake Your Tokens** Choose which token you want to stake, and how what amount of that token you want to deposit. The system will display how much protocol token (either reUSD or reUSDe) you will receive in retur 4. **Accept Terms & Fee Schedule** You will be presented the fee schedule and asked to accept the token purchase agreement. It will specify the fees, how tokens are minted, escrow conditions, etc. 5. **Tokens Enter Escrow** After you consent, your staked tokens will be tokenized and placed into an escrow contract. Important: before you can receive the final protocol tokens, you will need to complete KYC. 6. **Complete KYC** Supply the required documents. If successful with KYC, the protocol will mint your protocol tokens (reUSD or reUSDe) and transfer them to your wallet. If unsuccessful, you can access your staked tokens in escrow. 7. **Use Your Protocol Tokens** Once you have your protocol tokens: you can hold them and earn yield; use dashboards to track performance; and optionally transfer the token into other DeFi applications (staking, lending, etc.) to further maximize returns. * * * Putting It All Together: What to Know & What to Expect ------------------------------------------------------ * * * Risk vs. Reward: reUSDe = higher return + more underwriting risk. reUSD = lower volatility, more conservative. Choose based on your risk appetite. Security and Stewardship: They focus on safe vault services (e.g., Fire blocks), on-chain transparency, and licensed counter parties. All capital movements are supposed to be auditable. On boarding: Normally, on boarding is quite simple, but some KYC has to be done. Until you complete KYC, you can't access your funds, but they will be held in escrow. Real-World: This isn't just DeFi abstractions. The protocol works with real re insurers, generates real contracts (surplus note), and uses real licensed entities. The objective is to deliver DeFi simplicity with traditional insurance market structure and safety. --- *Originally published on [kys1mo](https://paragraph.com/@kys1mo/what-is-the-re-protocol)*