# Overcollateralized vault

Hex One is the first native yield-bearing stablecoin, backed by T-SHARES. This means the number of HEX in the collateral vault, keep increasing.

**TLDR:** T-shares represent a HEX payout. **$HEX1** represents several T-SHARES. Therefore, **$HEX1** = increasing future HEX payout.

## Embedded Yield

Hex One is the first stablecoin protocol with embedded yield. This can be translated into the **$HEX1** vault collateral automatically increasing in numerary value: T-SHARES represent an ever-increasing number of HEX tokens.

## Overcollateralized Vault

According to our calculations, the vault will contain the following collateralization ratios due to the native HEX yield:

Collateralization | 15 Years (MAX) |
---|---|

Base | 508% |

HEX/DAI < 50% | 254% |

HEX/DAI > 50% | 761% |

This means that if HEX drops 50%, the vault continues to be 254% overcollateralized. In other words, HEX would need an 80% drop for the vault to be below 100% collateralization. This is assuming all hex stakes have claimed the maximum amount of HEX1 stablecoin, per stake created.

Oppositely, if HEX increases 50% the vault automatically increases the collateralization to 761% until depositors mint HEX1 to satisfy the delta between the price change.

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