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Minting & Burning Process

The creation (minting) and destruction (burning) of $M tokens are strictly controlled by the MinterGateway.

Minting $M

The minting process is designed with security checkpoints involving a proposal, a delay, and execution:

  1. Update Collateral (Prerequisite): Before proposing a mint, a Minter must have an up-to-date and sufficient verified collateral value on record.

  2. Propose Mint: An active Minter initiates a mint request by calling proposeMint(): This creates a mint proposal with a unique mintId_. The proposal specifies the amount of $M to be minted and the recipient address. This step allows Validators to review pending mints.

    function proposeMint(uint256 amount, address destination) external returns (uint48 mintId_);

  3. Delay Period: A mandatory delay period (MINT_DELAY), set by governance, must pass after a mint is proposed before it can be executed. This window allows Validators to intervene (e.g., cancel the mint or freeze the Minter) if they detect any issues.

  4. Execute Mint: After the MINT_DELAY has elapsed, and before the proposal expires (within MINT_TTL - Time To Live, also set by governance), the Minter can execute the mint by calling mintM(): This function mints the specified amount of $M to the destination address, provided the proposal is still valid, hasn't been canceled, the Minter isn't frozen, and the mint doesn't violate collateralization requirements.

    function mintM(uint256 mintId) external;

The MINT_DELAY and MINT_TTL mechanisms create a secure time window for oversight, preventing immediate, unreviewed mints and ensuring proposals don't remain executable indefinitely.

Burning $M

$M tokens can be burned to reduce a Minter's outstanding debt. Any $M holder can initiate a burn against a specific Minter's debt:

function burnM(address minter, uint256 amount) external;
  • For Active Minters: Burning $M reduces the principal of their interest-accruing debt (activeOwedM).
  • For Deactivated Minters: Burning $M reduces their fixed inactiveOwedM. This serves as an informal liquidation mechanism, allowing the market to help settle the obligations of a Minter who has exited the system. The _repayForDeactivatedMinter internal function handles this logic.