ONyc Token Whitepaper

1. Introduction

The evolution of financial markets has paved the way for innovative investment instruments that bridge traditional industries with the digital economy. OnRe has built the world’s on-chain (re)insurance market tokenized using ONyc. The ONyc token offers a seamless connection between investors and the (re)insurance market. By leveraging blockchain technology, ONyc brings unprecedented transparency, liquidity, and efficiency to an industry that has traditionally been limited to institutional players, and in turn enables the $3tn alternative capital source of digital assets to be transformed into the (re)insurance market.

ONyc is a Solana-based digital asset representing fractional ownership in a regulated OnRe investment pool specializing in (re)insurance underwriting, backed by sUSDe. This token provides investors with a dynamic share of the pool’s value.

ONyc expands from single-asset collateral to a multi-collateral approach that funds real-world underwriting at scale. The on-chain yield coin is built so stablecoins no longer sit idle but instead work as productive collateral, funding RWAs, generating transparent yield, and scaling with institutional demand.

ONyc targets a 16% base yield, generated by reinsurance performance that remains uncorrelated across market cycles. Alongside this base yield, collateral assets contribute additional returns, creating a compound, multi-source yield designed to perform consistently and capture upside as markets evolve.

The pool is managed by On Re SAC Ltd, a segregated accounts company registered in Bermuda, and operates within a segregated account, ensuring that investor funds are legally ring-fenced. It is structured to align with Bermuda’s regulatory framework for insurance-linked investment vehicles and digital asset businesses, and operates under OnRe’s existing regulatory approvals, including its Class IIGB insurance licence and Class F Digital Asset Business (DABA) licence.

2. Market Opportunity

Reinsurance underwriting plays a crucial role in stabilizing global insurance markets, mitigating risks for insurers by spreading liabilities across a network of capital providers. However, access to these markets has historically been restricted to large financial entities. By tokenizing participation in reinsurance pools, ONyc democratizes this asset class, enabling a broader range of investors to to gain exposure to investments that are uncorrelated to traditional financial markets.

Reinsurance underwriting is a trillion-dollar industry that provides capital-efficient risk management for insurers worldwide. ONyc unlocks a new avenue for investors, enabling them to access regulated, yield-generating (re)insurance assets.

ONyc introduces:

• Superior Yield - Our on-chain reinsurance pool is uncorrelated to macro and crypto volatility, and is built utilizing sUSDe. This means it provides superior returns in a choppy or bear market, whilst returning greater yield on invested assets in a bull market compared to traditional reinsurance.

• Liquidity – The ONyc token can be traded on secondary markets. On-chain reinsurance allows ownership directly in the user's wallet so users can borrow against this position to further boost yields.

• Transparency – enables investors to track various yield sources (e.g., Ethena and reinsurance) with no hidden fees.

3. Token Mechanics

The ONyc token introduces an innovative way for investors to gain exposure to reinsurance profits while maintaining a flexible and liquid asset. The token's performance directly reflects the portion of the underlying investment pool, ensuring fair and proportional distribution of gains and losses.

3.1 Value Growth

ONyc tokens will grow as the pool earns money (premiums less claims) at a target rate of 12% p.a. in addition to the yield of the underlying asset (sUSDe). Adjustments to the 12% are subject to redemptions and unexpected losses and profits from our expected forecasts. We will upload up to date NAV prices (including sUSDe interest rates) which should dictate overall market rates of ONyc outside of redemption windows.

The nominal number of tokens held will represent the overall proportion of the pool owned, tracking ownership and value in real-time as users mint/redeem and pool performance develops.

4. Regulatory & Compliance

4.1 Bermuda Registration

• OnRe is registered in Bermuda and operates under a segregated accounts structure, ensuring investor funds are legally ring-fenced. It is structured to align with Bermuda’s regulatory framework for insurance-linked investment vehicles and digital asset businesses.

• The pool operates under Nayms’ existing regulatory approvals, including its Class IIGB insurance licence and Class F Digital Asset Business (DABA) licence, which govern capitalized underwriting and digital asset-based financial services.

4.2 KYC/AML Enforcement

• KYC is required for purchases and redemptions.

• Once verified, a user’s address is added to a whitelist stored in the application.

• ONyc may be sold or transferred to another wallet at any point during the investment life cycle.

5. Governance & Security

5.1 Fund Manager Controls

• Minting and burning.

• Issuance and redemption of tokens.

• Net Asset Value (NAV) price feeds.

• A multisig system is used for security.

5.2 Smart Contract Security

• Logs for minting, burning, transferring are recorded on-chain for transparency.

• Balances are rounded down to prevent over-allocation, with small lost fractions held for redistribution.

• Multisig approval is used for all fund manager controls.

6. Tokenomics & Revenue Model

6.1 Risk Management and Trading & Fees

• Freely tradable on secondary markets.

• Revenue sources:

  • Profit share on ONyc Pool performance.

  • Underwriting Commission on (re)insurance placements.

6.2 Token Mechanics

• Issuance: ONyc tokens are minted and sold at a fixed share value.

• Trading Platform: OnReX, our custom program, facilitates asset offers via multisig management.

• Order Management: Orders may be partially filled or closed, with residual assets returned to the multisig.

6.3 Redemption Process

• To redeem, a user must be KYC’d via the platform and meet our eligibility requirements, including being a sophisticated investor.

• Redemptions occur on a quarterly cycle.

• At the start of each quarter, there is a 30-day notice window during which users may exchange their ONyc tokens for redemption tokens.

• Redemptions are only completed on the next published redemption date which occurs at the end of the quarter, and subject to the available amount in the pool - the available amount is the amount that can be made available for redemption, taking into account existing and expected liabilities of the pool.

• If total redemption requests exceed the available amount, redemptions will be fulfilled pro-rata, with any remainder reconverted to ONyc tokens for future redemption rounds.

• The final value of redemptions is based on the last published NAV at the end of the quarter.

6.4 Liquidity & Market Making

• AMM Liquidity: We expect a significant portion of ONyc tokens to be allocated to provide ample liquidity in automated market making protocols, ensuring market access regardless of redemption dates. We will incentivise market makers to provide such liquidity.

• Market Making Bot: A bot actively arbitrages price differences to maintain the token price close to its net asset value (NAV).

• Direct Liquidity: Due to the limited liquidity of insurance contracts and fixed issuance/maturation schedules, direct liquidity is pre-planned to maximize investment efficiency and investor yield. KYC-vetted users may participate via our custom program, the ONyc Pool. Fund managers can adjust overall capital by minting additional ONyc tokens at a fixed price or by issuing redemption tokens (rONyc) for scheduled redemptions. AMM liquidity and a market making bot continuously ensure token price stability outside these scheduled redemptions. Tokens are issued on an ad-hoc basis depending on market needs.

• AMM vs Direct liquidity: AMM liquidity is instant, simple and has more predictable pricing, while Direct liquidity must follow a schedule and involves a two-step process, but allows the investor to bypass any AMM fees.

7. Conclusion

The ONyc Token represents the convergence of blockchain technology and institutional-grade financial instruments, providing investors with a novel opportunity to participate in the historically exclusive (re)insurance industry. By introducing a tokenized model that ensures compliance, liquidity, and equitable returns, OnRe is setting a new standard for digital investment products.

As we continue to refine our model and expand our offerings, the potential for additional stablecoin-backed pools remains an exciting avenue for future growth. Investors can look forward to further developments that enhance accessibility, risk diversification, and global reach.

The ONyc Token is a pioneering digital asset that brings institutional-grade (re)insurance investment to the blockchain. By combining transparency, liquidity, and compliance, it offers investors an efficient and regulated way to participate in one of the world’s most stable financial markets.

With real-time NAV tracking, and regulatory oversight, ONyc represents the next evolution in tokenized (re)insurance products.