# Loss Coverage (Yuzu Alpha)

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*In the event of a loss, coverage follows a strict waterfall — each layer is exhausted before the next is drawn upon.*
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**1. Yuzu Protection Pool (yzPP)** The first-loss tranche. yzPP absorbs losses before any impact reaches yzUSD depositors. See [Yuzu Protection Pool](https://yuzu-money.gitbook.io/yuzu-money/yuzu-stablecoin/yuzu-protection-pool-yzpp) 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](https://yuzu-money.gitbook.io/yuzu-money/yuzu-stablecoin/reserve-fund) for details.

All loss coverage is subject to [Terms and Conditions](https://yuzu-money.gitbook.io/yuzu-money/yuzu-stablecoin/terms-and-conditions) and available balances.


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