ARTH Guidebook
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Minting and Burning ARTH
This reviews the mechanics and scenarios that involve minting and burning ARTH

When is ARTH minted?

ARTH is minted when a collateral is deposited into any of the collateral pools which ensures that every ARTH minted will always have some kind of backing to ensure its stability. ARTH is never minted without some kind of collateral being deposited into the protocol.
Arbitrageurs looking to profit from the peg activity of ARTH can mint ARTH using cryptocurrency collateral whenever ARTH is trading above its target price. The extra ARTH that is minted is sold in the open market. A bet is being made by arbitrageurs that ARTH will fall back to its peg and will look to sell the newly minted ARTH whenever it's above its peg to realise a profit. This done by opening a loan and minting ARTH.
Example: this transaction shows ARTH being minted as a user deposits collateral.

When is ARTH burnt?

ARTH is burnt whenever the underlying collateral is redeemed or during the closure of a loan by a user. Due to the multiple pools the user can go to any one of the collateral pools to redeem their ARTH tokens.
Arbitrageurs looking to make a profit from the peg activity of ARTH can redeem ARTH for its underlying cryptocurrency collateral whenever it is trading below its target price.
Example: this transaction shows ARTH being burnt as it gets redeemed for it's underlying collateral.