In the event of a loss, coverage follows a strict waterfall — each layer is exhausted before the next is drawn upon.
1. Yuzu Protection Pool (yzPP) The first-loss tranche. yzPP absorbs losses before any impact reaches yzUSD depositors. See Yuzu Protection Pool for how it is funded and sized.
2. Reserve Fund If yzPP is insufficient to cover the full loss, the Reserve Fund covers any remaining shortfall. See Reserve Fund for details.
