Minting
To utilize Unitas stablecoins to satisfy financial purposes more efficiently, users might want to enter the Unitas ecosystem by minting Unitas stablecoins (currently USD1, USD91, USD971, and USD84). The minting basically has two types, both of which are in red in the figure:
Type 1: mint USD1 using USDT
Type 2: mint local stablcoins (USD91, USD971 and USD84) using USD1
The essential differences between type 1 and type 2 minting are:
type 1 minting marks the entry into the Unitas ecosystem, yet type 2 is and should not be interpreted this way;
type 1 minting is not allowed when the reserve ratio ≤ 130%; while type 2 minting is not allowed only in the global settlement process when the reserve ratio ≤ 100%. The bottom line is that type 1 minting is conditional and more restrictive; see sections: Over-Reserve Ratio and Risk Management for more details.
Important features of Unitas minting process (for both types)
the conversion experience is like a swap, and no CDP would be created;
the conversion happens at 100%, meaning that the minted tokens worth the tokens used for minting, so unlike DAI, minting itself does not involve any over-collateralization responsibility;
The user’s USDT or reserved assets will be deposited in the Reserve pool controlled by the protocol;
minting incurs fee but there is no slippage;
the minting price of the same local stablecoins can be different across different times, this is because of foreign exchange fluctuations.
For readers who are interested in more details but are still unclear about the minting process, here we specify a simple user journey to make things more concrete.
User journey:
Journey of a type 1 minting
User has USDT in their wallet
They connect their wallet to the protocol
They enter USD1 amount to mint
The protocol confirms there is enough reserve in insurance pool to mint new USD1
condition: the reserve ratio should be above 130%
The protocol deducts the required USDT amount
They choose the amount they require
User will see relevant amount of USDT deducted from wallet balance
there will be minting fee, to be set by the protocol
User will see USD1 in their balance after the end of the process
Journey of a type 2 minting
User has USD1 in their wallet
They connect their wallet to the protocol
They choose the desired token from USD91, USD971, or USD84
They enter the required amount of USD1 to be converted
Alternatively they enter the required amount of the chosen local stablecoins (USD91, USD971, or USD84) to be minted
Protocol will check the oracle price and show final cost/outcome to the user
User needs to confirm the final amount and initiate a wallet confirmation
there will be minting fee, to be set by the protocol
Once the user has approved the wallet spent the protocol will deduct the USD1 amount
The protocol will mint the chosen local stablecoins for the user
The user will receive the USD91, USD971, or USD84 amount in their wallet
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