Yield stack
Insurance Pool loss simulation
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Two risks, and they are not the same one
Resupply's yield-stacking and its Insurance Pool are two completely separate mechanisms bolted onto the same protocol, and conflating them is the most common mistake. The yield stack is a rate risk: you're borrowing reUSD against collateral that is already earning yield, and your net return depends entirely on whether the spread between what you earn (base collateral yield + redeployment yield) beats what you pay (the reUSD borrow rate). That spread can go negative — over-borrowing into a low-yield redeployment can make you worse off than simply holding the collateral unlevered.
The Insurance Pool is a completely different tail risk: it's the first-loss capital that absorbs bad debt if one of Resupply's approved Curve Lend or Fraxlend collateral markets can't fully cover a borrower default. You only carry this risk if you actively stake reUSD or RSUP into the Insurance Pool for its yield — a plain reUSD borrower who never stakes is not directly exposed to it, but the protocol's overall solvency still depends on the pool being large enough relative to the collateral markets it backstops.
Redemption caps are a third, separate constraint layered on top of both: even a fully solvent position can't necessarily exit instantly in size, because instant redemptions are capped at 20% of total redemption reserves per day system-wide and 10% per wallet, with a 1,000,000 reUSD ceiling per single transaction — so large exits may need to be split across multiple days regardless of whether anything has actually gone wrong.
FAQ
What is Resupply and how is reUSD different from crvUSD or GHO?
Resupply is a lending protocol that lets you mint the reUSD stablecoin against crvUSD (deposited into a Curve Lend market) or frxUSD (deposited into a Fraxlend market) as collateral — so your collateral is already earning that market's lending yield before you borrow anything against it. That is the core difference from GHO (borrowed against raw AAVE-market collateral) or straight crvUSD (minted against volatile crypto via LLAMMA soft-liquidation) — Resupply's collateral is itself a yield-bearing lending position, so borrowing reUSD against it stacks a second yield stream on top of the first.
How does the Insurance Pool replace per-position liquidation?
If one of Resupply's approved collateral markets runs into trouble (bad debt from a borrower default that the underlying Curve Lend or Fraxlend market can't fully cover), the Insurance Pool — funded by users staking reUSD and RSUP — repays the outstanding reUSD from that troubled market and sells whatever collateral it can recover, absorbing the shortfall so the protocol doesn't accrue system-wide bad debt. That is fundamentally different from LLAMMA or Ajna-style per-position liquidation: individual reUSD borrowers are not liquidated position-by-position the same way a perp or a crvUSD loan is — the loss, if any, is socialized across everyone staked in the Insurance Pool at the time.
What are Resupply's redemption caps and why do they exist?
To stop a bank-run-style drain during stress, Resupply caps instant reUSD redemptions at 20% of total redemption reserves per day system-wide, with a further per-wallet cap of 10% of total redemption reserves, and each individual redemption transaction is bounded between a 0.01 reUSD minimum and a 1,000,000 reUSD maximum. If you're planning a large exit, check both the daily system cap and your own wallet cap before assuming you can redeem the full amount in one transaction — a redemption that clears the per-transaction and per-wallet limits can still fail if the system-wide daily cap has already been used up by other redeemers.
What does "up to 20x capital efficiency" actually mean here?
It refers to the theoretical ceiling of stacking Resupply's own borrow capacity against Curve Lend/Fraxlend's borrow capacity on the same underlying collateral — not a fixed multiplier every user gets automatically. Your real effective yield depends entirely on three numbers you control: how much you deposit, how much reUSD you actually borrow against it, and what you do with that borrowed reUSD. Borrowing the maximum and redeploying it at a low or negative net yield can easily underperform not borrowing at all once the reUSD borrow rate is subtracted — the calculator above shows your real blended number, not the marketing ceiling.
Is Insurance Pool staking risk-free yield?
No — it is the opposite of risk-free by design. RSUP/reUSD stakers in the Insurance Pool are explicitly the first-loss capital that absorbs bad debt from any approved collateral market, in exchange for a share of protocol fees/yield while nothing goes wrong. The loss simulation above treats your stake as a pro-rata share of the total pool: if a bad-debt event equal to X% of the pool's total size occurs, everyone staked in the pool — including you — takes roughly that same X% haircut on their principal, regardless of which specific collateral market caused the shortfall.