# Overcollateralized vault

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**TLDR:** T-shares represent a HEX payout. **$HEX1** represents several T-SHARES. Therefore, **$HEX1** = increasing future HEX payout. 
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## 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](https://learn.hex1.club/hex-one-protocol/basics/how-usdhex1-peg-works), the vault will contain the following collateralization ratios due to the native HEX yield: 

<table><thead><tr><th>Collateralization</th><th>15 Years (MAX)</th><th data-hidden>10 Years (MIN)</th></tr></thead><tbody><tr><td>Base</td><td>508%</td><td>361%</td></tr><tr><td>HEX/DAI &#x3C; 50%</td><td>254% </td><td>180%</td></tr><tr><td>HEX/DAI > 50%</td><td>761%</td><td>541%</td></tr></tbody></table>

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.&#x20;

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.&#x20;