> For the complete documentation index, see [llms.txt](https://y2k-finance.gitbook.io/y2k-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://y2k-finance.gitbook.io/y2k-finance/products/earthquake.md).

# Earthquake

Earthquake vaults redefine a core traditional Financial product, catastrophe bonds (CAT), while applying the primitive to a native DeFi setting. A CAT bond is an instrument that pays the issuer when a predefined disaster risk is realized, such as a hurricane or an earthquake. Earthquake uses the CAT bond concept but applies it to a de-peg event for stable coins, liquid wrappers and other derivative products in DeFi. 

Users can hedge against these assets de-pegging by depositing ETH collateral into the Premium vault and receiving ERC-1155 Y2K([Vault Tokens](/y2k-finance/tokenomics/vault-tokens.md)) in return.