> For the complete documentation index, see [llms.txt](https://cryptodao-it.gitbook.io/c-dao/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cryptodao-it.gitbook.io/c-dao/1.-overview/core-concepts/minting-model.md).

# Minting Model

## Collateralized vs Uncollateralized

|                  | **Collateralized Minting**                                          | **Uncollateralized Issuance**              |
| ---------------- | ------------------------------------------------------------------- | ------------------------------------------ |
| **How it works** | Treasury receives assets → Mints tokens against collateral          | Contract mints tokens with no backing      |
| **Backing**      | Every token backed by verifiable on-chain assets                    | Zero backing — tokens created from nothing |
| **Transparency** | Full on-chain records, permanently auditable                        | No minting records, opaque supply          |
| **Risk**         | Limited by collateral ratio                                         | Unlimited — team can mint and dump anytime |
| **Examples**     | USDT (USD reserves), DAI (crypto collateral), PRO (treasury assets) | Most memecoins, rug pulls, scam tokens     |

## How PRO Minting Works

```
Treasury receives USDT or LP assets
        ↓
Collateral recorded on-chain
        ↓
Minting contract triggered
        ↓
PRO minted proportional to collateral
        ↓
Fully auditable, no hidden supply
```

Every PRO in circulation has corresponding backing in the treasury.

## Why This Matters

Uncollateralized tokens have a fatal flaw:

```
Team deploys token contract
        ↓
Team mints unlimited supply (costs nothing)
        ↓
Team sells into liquidity pool
        ↓
USDT drained from pool
        ↓
Users left with worthless tokens
```

This is how most rug pulls work. The contract allows unlimited minting with no backing.

## Crypto DAO's Guarantee

* **No collateral = No minting.** The treasury contract cannot mint without receiving assets first.
* **On-chain verification.** Anyone can audit treasury holdings vs circulating supply.
* **Multi-signature control.** Minting requires 5/6 signatures — no single actor can mint.

## Verification

{% stepper %}
{% step %}

### Check the treasury contract holdings

Inspect the treasury contract on a block explorer to see what assets it holds.
{% endstep %}

{% step %}

### Compare to total PRO supply

Compare the treasury holdings to the total circulating PRO supply.
{% endstep %}

{% step %}

### Calculate backing ratio

Compute the backing ratio (treasury value vs PRO supply) to confirm sufficient collateral.
{% endstep %}
{% endstepper %}

All data is public and on-chain.

## Related

* [Treasury Module](broken://pages/49146f5b8cb1f02ef801858b3b8a108016f8183b)
* [Multi-Signature](broken://pages/483b327efa0be459840aad0154cd0b601b122e5d)


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