xETH
Search
K

Surplus and Overcollateralization

xETH collects yield on the reserves it holds to collateralize xETH, any amount not paid out to xETH stakers or incentivized pools is retained as surplus which acts as a buffer, the bigger the surplus becomes the more overcollateralized and safer xETH becomes.
In the event of protocol losses the surplus absorbs them, hence a large surplus is desired.