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Minting and burning

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Minting Tokens

Minting creates new plDXY-BEAR and plDXY-BULL tokens by depositing USDC collateral.

What happens when you mint:

  1. You deposit USDC to the protocol

  2. You receive equal amounts of plDXY-BEAR and plDXY-BULL

The ratio:

Deposit 2 USDC → Receive 1 plDXY-BEAR + 1 plDXY-BULL

Constraints:

  • Minting is disabled when the protocol is paused

  • Minting is disabled if the oracle price reaches the $2.00 cap (liquidation scenario)

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Burning Tokens

Burning destroys your tokens and returns the underlying USDC collateral.

What happens when you burn:

  1. You return equal amounts of plDXY-BEAR and plDXY-BULL

  2. The protocol burns both tokens

  3. You receive USDC back

The ratio:

Return 1 plDXY-BEAR + 1 plDXY-BULL → Receive 2 USDC

Before burning:

  • You must hold equal quantities of both tokens

Key difference from minting:

Burning always works—even when the protocol is paused—as long as the protocol remains solvent. This guarantees exit liquidity in all normal circumstances.

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Why Equal Pairs?

You can only mint and burn in matched pairs. This design ensures the protocol stays balanced: every BEAR in circulation has a corresponding BULL, and every token pair is backed by exactly $2.00 in USDC.

If you hold only one token type and want to exit, you have two options:

  1. Swap your token for USDC on Curve (plDXY-BEAR) or via the Zap (plDXY-BULL)

  2. Acquire the matching token to burn as a pair

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