Minting JOO
Minting JOO
Mechanism: Users can mint JOO by depositing BNB into the protocol's smart contract.
Fee: A 2.5% fee is applied to each minting transaction. Fees are added to the Joo Loans protocol, every time increasing the BNB backing per JOO forever.
Minting stops forever once 100,000,000,000 JOO have been minted.
Once the max supply is reached, new JOO tokens can no longer be minted, and the supply becomes truly deflationary via existing burning mechanisms.
Redeeming JOO
The simplest way to redeem your JOO for BNB is to 'sell' back to the contract via the trade tab in the Joo Loans app. This incurs the same 2.5% fee as minting, burns the JOO forever, and sends the underlying BNB to the user. Fees are distributed to the contract, LP incentives, and the team at the same rates as minting.
Alternatively, JOO can be redeemed by taking a loan against your position and instantly defaulting. This returns the underlying BNB to the user, minus the collateral premium and interest, and again burns the JOO forever.
Minting Example
Let’s say there are 100 JOO tokens in existence, and there are 100 BNB backing them on the contract. That means the price of 1 JOO is 1 BNB. There is a 2.5% minting fee, so to mint the next JOO token, a user must pay 1.025 BNB. Of the fee collected, 70% or 0.0175 BNB, is added to the backing, so there are now 101 JOO and 101.0175 BNB. We can calculate the new price of JOO by doing 101.0175 BNB / 101 JOO = 1.0001732673 BNB/JOO. The price of every JOO token has increased! The other 30% of the fee collected, or 0.0075 BNB, is distributed to LP incentives and the team.
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