Resupply Yield and Collateral Guide: How reUSD Borrowing Works

Resupply connects two positions: an eligible Curve Lend or Fraxlend deposit that earns the underlying market's variable return, and a separate reUSD debt secured by that deposit. The design can release stablecoin liquidity without first withdrawing the lending position. Whether it improves net returns depends on current rates, loan size, incentives, fees and the ability to exit both legs.

This page focuses on the economics and risks of collateralized borrowing. For the token roles and staking mechanics, see our Resupply overview. For dated governance changes, see the September 2026 Resupply update.

The positions and tokens involved

• Yield collateral: only supported Curve Lend or Fraxlend market positions can secure a Resupply loan; verify the live market and its contract.
• reUSD: the stablecoin borrowed against the position, with a variable debt rate and a market price that may differ from one dollar.
• sreUSD: a savings token for reUSD; using it in another lending market adds a separate layer of risk.
• Insurance Pool: reUSD suppliers accept specified first-loss exposure in return for variable incentives and revenue.
• RSUP: governance token whose staked form has voting and protocol-revenue participation under current rules.

Borrow-rate formula and an example

Resupply publishes the borrowing rate as the highest of three values: half of the selected lending market's rate, half of the sfrxUSD rate, or 2%. The floor or sfrxUSD benchmark can therefore make borrowing cost more than half of the collateral's lending yield.

For illustration only, suppose $100 of collateral earns 8% annually and a $50 reUSD loan costs 4%. A year of unchanged rates would produce $8 in collateral income and $2 in debt interest before incentives, fees or price changes. If the borrow rate rose to 6%, debt interest would become $3. If collateral yield fell to 2%, the spread could turn negative even before other costs. These numbers are examples, not live rates or a return forecast.

Convex incentives and leverage

Some eligible Curve positions may receive Convex-related rewards on top of lending interest. Those rewards, their token value and eligibility vary by market. Do not treat a displayed boosted APR as the same as cash income available to repay reUSD debt.

Looping borrowed reUSD into more collateral increases both exposure and debt. It also makes a reUSD depeg, a fall in collateral value or a tightening of the loan limit more consequential. Check the live liquidation threshold, debt ratio, incentives and withdrawal liquidity at every step rather than relying on a stated maximum leverage figure.

Security record and the June 2025 exploit

Resupply's post-mortem records a June 26, 2025 attack on a newly deployed crvUSD–wstUSR market. Manipulation of a vault share conversion led to an exchange-rate calculation rounding to zero, bypassing the solvency check and creating about 10 million reUSD of bad debt. The affected market was paused.

Resupply later proposed a recovery plan involving the Insurance Pool and treasury. A proposal is not proof of full recovery. Depositors should check executed governance decisions and the current pool position, since the Insurance Pool can absorb protocol losses. Market-specific oracle and deployment risk remain relevant even if the original flaw was addressed.

Questions borrowers should ask

• Is a positive yield spread guaranteed? No. The rate is the highest of three inputs, and collateral rates and token incentives fluctuate.
• Can I exit immediately? Repaying reUSD releases Resupply collateral, but withdrawing the underlying lending position also requires liquidity in that market.
• Does RSUP rise when the protocol expands? The token has governance and current revenue participation, but its market price and return are not guaranteed by a borrow-cap increase.
• What risks matter most? Smart-contract and oracle failure, bad debt, liquidation, reUSD and collateral-token peg movement, and withdrawal liquidity.