> For the complete documentation index, see [llms.txt](https://docs.onre.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.onre.finance/introduction/yield-mechanisms.md). # Yield Mechanisms ### Reinsurance Premiums A meaningful share of ONyc’s yield comes from reinsurance. When insurers transfer risk to a reinsurer, part of the premium goes with it. These cash flows are contractual, predictable, and grounded in long-standing underwriting practices. They reflect actual insurance activity, not market speculation. Reinsurance premiums have been steady for decades. Their performance is shaped by loss experience, portfolio construction, and disciplined underwriting rather than equity cycles or crypto volatility. This gives ONyc a core return stream tied to one of the most resilient areas of global finance. ### Collateral Returns The collateral backing ONyc generates its own return, separate from the premium income produced through reinsurance. This collateral is managed to provide steady performance while maintaining the strength and integrity of the asset. Collateral returns enhance ONyc’s overall yield and contribute an additional layer of stability. Combined with the premium component, they help create a balanced profile that is less sensitive to short-term market movements. ### How the Pieces Work Together ONyc combines these two sources into a single onchain asset that is fully transparent and composable across DeFi. The blend of premium-based and collateral-based returns creates a yield profile that is less dependent on market behavior and more anchored in real economic activity. This structure gives ONyc several advantages: * Yield durability across different market conditions * Protection against volatility in crypto and traditional markets * Exposure to real-world risk and real-world performance * A balanced return stream that stays grounded in insurance fundamentals With both components visible through OnRe’s Transparency Dashboard, users can see exactly what drives ONyc’s yield and how each part contributes over time. ### Why This Matters Yield in DeFi is often driven by incentives, emissions, or speculative activity. ONyc is built differently. Its returns flow from established insurance and collateral markets that have operated for decades with consistent performance. By combining them in a single onchain framework, ONyc brings real-world yield into an accessible, transparent format. For users, this means an asset designed for long-term reliability rather than short-term swings. For the broader ecosystem, it’s a new path toward bringing meaningful real-world yield onchain in a way that aligns with how institutional-grade products are constructed. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.onre.finance/introduction/yield-mechanisms.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.