Minting

What is Minting?

Minting is the secondary value accrual strategy of Luxor. When users mint LUX tokens, they are actually selling their assets in order to buy a bond from the protocol. Minting Actions are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the minter with terms for a trade at a future date. These terms include a predefined amount of LUX the minter will mint at the completion (end) of their vesting period. The bond becomes redeemable as it vests. In other words, in a 5-day term, after 2 days into the term 40% of the rewards are claimable.

Minting is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders mints discounts more or less unpredictable. Therefore minting is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Allowing users to purchases bonds through Minting allows Luxor to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders.

Since Luxor becomes its own market, on top of additional certainty for LUX investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.

Why is it Minting and not Bonding?

Here at Luxor we believe that minting better describes the action that users are taking, when purchasing LUX with different assets. If you go to the "Mint" page of the website, you will be able to mint LUX tokens, effectively selling your assets for discounted LUX tokens. Despite the name difference, a Minting Action is exactly the same as a Bond Purchase on Olympus DAO. You can find the minting options for Luxor in the Mint **** Page!