What is Resupply Finance? reUSD, RSUP and the Convex × Yearn CDP Protocol Explained

Resupply Finance is a decentralised CDP (Collateralised Debt Position) stablecoin protocol on Ethereum, co-built by Convex Finance and Yearn Finance. It allows users to deposit yield-bearing lending positions — specifically crvUSD positions from Curve Lend (LlamaLend) and frxUSD positions from Fraxlend — as collateral to mint reUSD, the protocol's native dollar-pegged stablecoin. Crucially, the collateral continues earning its underlying yield — boosted by Convex Finance's accumulated veCRV — throughout the entire life of the loan.

Announced in December 2024 and launched on Ethereum mainnet on 20 March 2025, Resupply was built as a joint subDAO project between two of DeFi's most established protocols. Convex Finance contributes its veCRV voting power and boost infrastructure; Yearn Finance contributes its yield strategy expertise and vault architecture. The result is a protocol that sits at the intersection of stablecoin issuance, yield optimisation, and DeFi's governance layer.

The Core Mechanic: Yield-Bearing Collateral

The defining innovation in Resupply Finance is that the collateral deposited by borrowers does not sit idle — it continues generating yield while securing the loan. When a user deposits crvUSD into Curve Lend, they receive an LP token representing their lending position. That LP token earns lending interest from borrowers on Curve Lend's isolated markets. In Resupply, that LP token becomes collateral for a reUSD loan.

When the LP token enters Resupply, it is automatically staked on Convex Finance. Convex's massive veCRV position provides the maximum 2.5x CRV boost to the staked position, meaning the underlying collateral earns boosted CRV and CVX token rewards on top of the base Curve Lend interest rate. This stacked yield — Curve Lend interest + boosted CRV + CVX — is what the collateral earns while the reUSD loan is outstanding.

Resupply's borrow rate is structurally set at half the yield rate of the deposited collateral. If a crvUSD lending position earns 10% APY, Resupply's borrow rate for reUSD against that collateral is approximately 5%. The positive carry — the gap between what collateral earns and what the loan costs — is the financial engine that makes the strategy self-sustaining.

How to Use Resupply Finance: Step by Step

Using Resupply Finance involves three core steps. First, users obtain crvUSD or frxUSD — Curve Finance's and Frax Finance's native stablecoins — and deposit them into a Curve Lend (LlamaLend) market or Fraxlend market respectively. This creates a yield-bearing LP token position.

Second, users bring that LP token position to Resupply Finance (resupply.fi), deposit it as collateral, and mint reUSD against it at a borrowing rate below the collateral's yield. The collateral is automatically staked on Convex Finance in the background.

Third, the borrowed reUSD can be deployed elsewhere in DeFi — supplied to the Resupply Insurance Pool to earn RSUP rewards and protocol fees, added to reUSD liquidity pools, looped back into additional crvUSD/frxUSD deposits to compound the strategy, or used for any other purpose. The leverage looping feature within Resupply automates the loop step, allowing users to select a target leverage ratio (up to approximately 20x) in a single transaction.

reUSD: Resupply's Native Stablecoin

reUSD is Resupply Finance's native overcollateralised stablecoin, soft-pegged to the US dollar. It is minted by borrowers who post yield-bearing lending positions as collateral. As of May 2026, reUSD has a circulating supply of approximately 35–90 million units, making it a mid-sized DeFi stablecoin by market standards.

reUSD's peg is maintained through a redemption mechanism: if reUSD trades below $1, arbitrageurs can redeem reUSD directly against protocol collateral at face value, removing reUSD from circulation and restoring the peg. This mechanism is similar to the redemption systems used by Liquity (LUSD) and Raft, and does not rely on centralised price feeds to trigger peg defence — the arbitrage incentive is structural.

reUSD can be used across DeFi wherever it is accepted — in liquidity pools, as a trading pair, or as a building block in yield strategies. Resupply's Insurance Pool and LP pools are the primary on-protocol yield venues for reUSD holders.

RSUP: Resupply's Governance and Rewards Token

RSUP is Resupply Finance's governance token, distributed as an incentive to protocol participants. Token emissions are divided across three recipient groups: 50% of RSUP emissions go to liquidity providers in reUSD trading pools (LP rewards), 25% go to users who supply reUSD to the Insurance Pool, and 25% go to other protocol participants and development contributors.

RSUP holders can vote on governance proposals covering protocol parameters, new collateral types, borrowing rate adjustments, and emission allocations. The token also accrues value through its connection to the protocol's bribe infrastructure: RSUP emissions to LPs create demand for gauge weight from protocols wanting reUSD liquidity, which can be directed via Votium Protocol — linking Resupply to the same bribe economy as Convex Finance and Curve.

RSUP distributions route through Votium, meaning vlCVX holders indirectly benefit from Resupply's growth as protocols bid for reUSD liquidity gauge weight using the same bribery system used for CRV emissions.

The Insurance Pool

The Resupply Insurance Pool is the protocol's stability backstop. Users who supply reUSD to the Insurance Pool serve as the first line of defence in the event of a bad debt event — if a borrower is liquidated and their collateral is insufficient to cover the loan, Insurance Pool depositors absorb the shortfall before the protocol's own reserves.

In exchange for bearing this risk, Insurance Pool depositors receive 25% of all RSUP token emissions, protocol fee revenue, and a share of collateral from liquidated positions. The yield on Insurance Pool deposits is therefore variable and depends on both RSUP token price and the frequency and severity of liquidations.

The Insurance Pool is conceptually similar to Aave's Safety Module and Liquity's Stability Pool — a yield-bearing risk buffer that allows the protocol to remain solvent through adverse market conditions without requiring centralised intervention.

Built-in Leverage Looping

Resupply Finance includes a native leverage looping feature that allows users to amplify their yield exposure in a single transaction. Rather than manually looping — depositing collateral, borrowing reUSD, converting to crvUSD, depositing back into Curve Lend, and repeating — users can specify a target leverage ratio in the Resupply interface and the protocol executes the full loop atomically.

The maximum leverage available depends on the collateral's LTV ratio. With typical LTV settings, users can achieve approximately 10–20x effective leverage on their base crvUSD or frxUSD position. At 10x leverage on a collateral yielding 8% APY, the gross yield exposure on the original capital becomes approximately 80% — minus borrowing costs, minus Convex fees. Net yields at high leverage are material but carry proportionally higher liquidation risk.

The key safety feature of Resupply's leverage model is that both the collateral and the debt are in stablecoin-denominated assets (crvUSD / frxUSD on the collateral side; reUSD on the borrow side). Liquidation risk comes from the two assets diverging — for example, if crvUSD depegs significantly — rather than from ETH price volatility, which is the dominant risk in leveraged ETH lending strategies.

Resupply Finance vs Traditional CDP Protocols

Traditional CDP protocols like MakerDAO (DAI), Liquity (LUSD), and Prisma Finance use volatile assets — ETH, wBTC, liquid staking tokens — as collateral. These are subject to sudden price collapses that can trigger mass liquidations during market downturns. Resupply uses stablecoin lending positions as collateral, which are far more price-stable by design. The primary risk in Resupply is not ETH price volatility but stablecoin depegging and interest rate fluctuation.

The yield-on-collateral mechanic also distinguishes Resupply from legacy CDP protocols. In MakerDAO, collateral (ETH, wBTC) earns no yield while the DAI loan accrues debt. In Resupply, the stablecoin collateral earns Convex-boosted CRV yield throughout, creating a fundamentally different economic profile — one designed for positive carry rather than simple leverage.

Resupply is closest in spirit to Inverse Finance's DOLA borrow mechanism and Raft Finance's approach, but with Convex's boost infrastructure as a native component — something neither competitor has replicated.

Security and Audits

Resupply Finance uses immutable, non-custodial smart contracts that underwent peer reviews and external security audits prior to launch. Immutability means no administrative key can modify the core protocol parameters after deployment — the same security guarantee provided by Convex Finance's core veCRV contracts.

Key risks in Resupply Finance include: smart contract bugs in Resupply, Convex, Curve Lend, or Fraxlend contracts; crvUSD or frxUSD depegging events (which affect collateral value); oracle failures; and Insurance Pool insufficient coverage during mass liquidation events. The stablecoin-denominated collateral reduces ETH price crash risk but does not eliminate systemic stablecoin risk.

Resupply was exploited in June 2025 for approximately $9.6 million. The attack targeted a newly deployed wstUSR market roughly 90 minutes after it went live. The attacker donated a large amount of crvUSD to the vault while minting a single wei of shares, which inflated the share exchange rate so far that the collateral price the contract read collapsed to effectively zero. That let them bypass the solvency check and borrow far more reUSD than the position backed.

The root cause was the price oracle implementation in newly created, low-liquidity markets rather than a flaw in the core CDP mechanics. Resupply's recovery plan reported roughly $2.87 million repaid by the treasury and partners, and proposed burning 6 million reUSD — about 15.5% of the Insurance Pool — to retire most of the remaining bad debt. Independent analyses were published by Halborn, BlockSec and QuillAudits.

Two things follow from that, and both matter more than the headline number. First, a donation attack on a thinly funded new market is a known class of bug, so the relevant question is whether market deployment is now hardened against it rather than whether this specific instance was patched. Second, the Insurance Pool worked as designed — it absorbed the shortfall, which is exactly what depositors are paid to do. Anyone supplying it should understand that is the trade.