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

# Minting

**Minting EGGS:**

* **Mechanism:** Users can mint EGGS by depositing S into the protocol's smart contract.
* **Fee:** A 2.5% fee is applied to each minting transaction. Fees are added to the protocol, increasing the S backing per EGGS.
* **Supply Cap:** Minting stops once 100,000,000,000 EGGS have been minted. After this, new EGGS tokens can no longer be minted and the supply becomes truly deflationary via existing burning mechanisms. *<mark style="color:$primary;">**The max supply was minted within three days of initial EGGS launch. EGGS can now only be acquired via exchanges.**</mark>*

<figure><img src="https://3389746960-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F6XOTuBliZWmYNBrB0hJ2%2Fuploads%2FZp3bQmSDXhql4KogXX5m%2FWelcome%20to%20FigJam-6.png?alt=media&amp;token=585edfbb-6c1d-4e0a-a84c-77d2490bb1f4" alt=""><figcaption><p>Minting Asset Flow</p></figcaption></figure>

**Redeeming EGGS:**

The simplest way to redeem your EGGS for S is to 'sell' back to the contract via the 'swap' tab in the dApp.  This incurs the same 2.5% fee as minting, but burns the EGGS and sends the underlying S to the user. Fees are distributed to the contract, LP incentives and team at the same rates as minting.&#x20;

Alternatively, EGGS can be redeemed by [taking a loan](/docs/documentation/eggs/loans.md) against your position and [instantly defaulting](/docs/documentation/eggs/loans.md#instant-default-redeem-eggs-for-s). This returns the underlying S to the user, minus the collateral premium and interest, and burns the EGGS.

***Minting Example:***

* Let's say there is 100 EGGS tokens in existence, and there is 100 S tokens backing them on the contract. That means the price of 1 EGGS is 1 S. There is a 2.5% minting fee, so to mint the next EGGS token a user must pay 1.025 S. Of the fee collected, 70% or 0.0175 S, is added to the backing, so there is now 101 EGGS and 101.0175 S. We can calculate the new price of EGGS by doing 101.0175 S / 101 EGGS = 1.0001732673 S/EGGS. The price of every EGGS token has increased! The other 30% of the fee collected, or 0.0075 S, is distributed to LP incentives and the team.

<pre class="language-html" data-full-width="false"><code class="lang-html"><strong>[User Deposits 1.025 S]
</strong>         |
         v
+---------------------------+
|  EGGS Token Smart Contract |
+---------------------------+
         |
         |---> Adds to Contract Backing:
         |        - 1.00 S (Base Amount)
         |        - 0.0175 S (70% of Fee)
         |
         |---> Distributes Fees:
         |        - 0.00375 S (15% of fee) to LP Incentives
         |        - 0.00375 S (15% of fee) to Team
         |
         |---> Mints 1 EGGS Token
         v
[User Receives 1 EGGS Token]
</code></pre>