🔄Minting & Redeeming Synths

Minting Synthetic Assets

In order to mint 1 Synth Avax (xsAvax) token users must supply 1 AVAX, (1 - CR) of this will be converted to AVA/AVAX LP held as POL for redemption stability.

For example - CR = 90%, to mint 100 xsAVAX, 90 AVAX will be deposited into the AVAX pool reserve and 10 AVAX will be converted to AVA/AVAX LP held as POL

1️⃣ Provide Collateral – Users interact with the mint function which deposits AVAX into the backing contract. 2️⃣ Collect Synthetic Tokens – Users interact with the Collect function on the contract to receive xsAvax in equal ratio to their AVAX input minus the mint fee. 3️⃣ Use & Earn – Create CL LP with your xsAVAX in a tight range and deposit into the farms to earn double or triple digit yields from Ava rewards as well as trading trading fees on your AVAX.

Redeeming Synthetic Assets

When 1 xsAVAX is redeemed, the system returns CR worth of AVAX and (1 - CR) worth of AVA.

For example - CR = 90% If you want to redeem 100 xsAVAX -> 90% will be returned as AVAX and 10% as unlocked AVA

1️⃣ Redeem Synthetic Tokens – Users can redeem any amount of their xsAvax holding at any time through the dapp. Doing so burns the xsAvax input. 2️⃣ Collect Backing Tokens – Once the redemption transaction is processed users can collect the underlying collateral as native AVAX as well as a portion of AVA tokens up to the current CR minus the redemption fee. If CR is 100% then users will receive 1:1 xsAvax:Avax minus the redemption fee.

Flash Loan Protection

After both Minting or Redeeming, you will have to additionally collect your minted or redeemed tokens in a separate transaction. This 2 step process completely eliminates the possibility of flashloan attacks.

Fees

There is a 0.5% fee for minting and 0.5% fee for redeeming collected in AVAX this is transferred to AVA stakers and lockers as claimable rewards.

Both minting and/or Redeeming may be paused based on market conditions and for Risk Management.