# Minting

**Mechanism**

* **Minting:** You can create new cbEGGS by depositing ETH into the protocol's smart contract.
* **Fee:** There is a 2.5% fee when minting cbEGGS. This fee goes straight into the protocol, which increases the ETH backing for every cbEGGS.
* **Supply Cap:** Once 1,000,000,000,000 cbEGGS are minted, no more can ever be made. After that point, cbEGGS becomes truly deflationary with each transaction.

**Redeeming cbEGGS**

* **Direct Sell:** The easiest way to get your ETH back is to “sell” cbEGGS to the contract in the ‘swap’ tab of the dApp. You’ll pay the same 2.5% fee as minting, and the leftover goes to the protocol, LP incentives, and the team at the same rates as minting.
* **Loan Redemption:** Alternatively, you can redeem cbEGGS by taking a loan against your position and instantly defaulting. This sends your ETH back to you, minus the collateral premium and interest.

#### Minting Example

**Step 1: The Starting Point**

* Imagine there are already 100 cbEGGS tokens in existence.
* The contract is holding 100 ETH to back these tokens.
* This means the price of each cbEGGS is 1 ETH (100 ETH ÷ 100 cbEGGS).

**Step 2: The Minting Fee**

* To create the next cbEGGS token, you need to pay a 2.5% fee on top of the 1 ETH price.
* So you pay 1.025 ETH in total.

**Step 3: Where the Fee Goes**

* Out of that 0.025 ETH fee, 70% (or 0.0175 ETH) is added to the protocol’s ETH backing.
* The remaining 30% (0.0075 ETH) is split between:
  * Liquidity provider incentives
  * The team
  * And remember, 10% of the ETH fee is **burned forever**, removing it from circulation.

**Step 4: The New Price**

* After you mint your cbEGGS, the contract now holds 101.0175 ETH.
* There are also 101 cbEGGS in existence.
* The new price is 101.0175 ETH ÷ 101 cbEGGS = **1.0001732673 ETH per cbEGGS**.
* Notice how every cbEGGS becomes slightly more valuable!

**Step 5: The Takeaway**

* Each time someone mints / sell new cbEGGS, part of the fee increases the ETH backing.
* This naturally pushes up the price of every cbEGGS token.
* It’s a simple but powerful way for cbEGGS holders to see their tokens grow in value over time!