The rule
Where it comes from
On 8 February 2026 Vitalik Buterin posted that 
USDC savings interest is not decentralized finance, and set out when a stablecoin backed by real-world assets is still a meaningful improvement for the person holding it: when it is overcollateralized and diversified enough that it would stay collateralized if any single backing asset failed. He wrote the condition as "max share of any individual backing asset <= overcollateralization ratio". Coverage: Cointelegraph, CryptoNews AU, Bankless Times, 9 February 2026.
How REALS writes it
VAULT() - WORST_FAILURE() >= SUPPLY()VAULT()is everything the vault holds, each token at the low side of its live price.WORST_FAILURE()is the most a single issuer's failure could take.SUPPLY()is the number of REALS outstanding, each owed one dollar.
Issuers, not tokens
A naive version of the rule subtracts the largest token. That is not enough. 
syrupUSDC is a book of loans paid in USDC: if Circle fails, USDC falls and syrupUSDC falls with it, even though Maple did nothing wrong. Paxos issues both 
USDG and PAXG, and Tether both 
USDT and XAUt0, so either of them failing takes a dollar and an ounce of gold together.
So REALS counts per issuer. For each issuer it adds up every token that falls with it:
| Issuer | Takes down |
|---|---|
| Circle | USDC and syrupUSDC |
| Tether | USDT and XAUt0 |
| Paxos | USDG and PAXG |
| Maple | syrupUSDC |
| USD.AI |  sUSDai |
| Backed | SPYx |
WORST_FAILURE() is the largest of those sums.
What it means for supply
The rule caps how many REALS can exist. With the vault spread evenly across six independent issuers, at most five dollars of REALS can exist for every dollar of buffer. Because Circle, Tether and Paxos each sit under two tokens, the real cap is lower whenever one of those pairs is the biggest exposure. As fees and yield add to the buffer, the cap rises on its own.
When one issuer broke before
- 2022-05-12: USDT dipped to about $0.95 during the Terra collapse.
- 2023-02-13: New York's regulator ordered Paxos to stop minting BUSD.
- 2023-03-11: USDC fell to about $0.87 after Silicon Valley Bank, holding $3.3 billion of Circle's reserves, failed.
Each time, one issuer was the problem and the others kept working. That is the case REALS is built for.