Clear DefinitionsMint and Burn Mechanism
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Pronunciation
[mint and burn mek-uh-niz-uhm]
Definition
A dynamic supply model where tokens can be created (`minted`) or destroyed (`burned`) by protocol rules to manage supply and price stability.
Key Points Intro
Mint/burn mechanisms regulate supply via:
Key Points
Governed minting: Authorized contracts or roles can create new tokens.
Automatic burning: Protocol fees or conditions trigger burns.
Supply adjustment: Balances token issuance with removal.
Economic stabilization: Used in algorithmic stablecoins and DAOs.
Example
A DAO mints 1 000 new tokens monthly for community rewards and burns 20% of swap fees.
Technical Deep Dive
Token contract includes `mint(address,uint)` restricted by `MinterRole`, and `burn(uint)` open to holders. Emission controller calls `mint()` per schedule. Fee router calls `burn()` on collected fees. `totalSupply` updated accordingly.
Security Warning
Unrestricted mint roles can be exploited to inflate supply; enforce multisig and timelocks.
Caveat
Frequent supply changes can confuse users and integrations expecting fixed supply.
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