> For the complete documentation index, see [llms.txt](https://pumpbtc.gitbook.io/pumpbtc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://pumpbtc.gitbook.io/pumpbtc/tech-specs/mint-and-burn-process.md).

# Mint & Burn Process

## Mint Process

The minting process in PumpBTC represents the creation of new wrapped tokens, specifically $pumpBTC. This process is initiated when a user deposits assets into the PumpBTC system. When a user commits their assets, they are transferred directly to the partnered Custodian, not to PumpBTC itself. Upon receiving these assets, the Custodian triggers a mint transaction to the PumpBTC smart contract. This action results in the creation of new $pumpBTC tokens at a 1:1 ratio to the deposited assets. Finally, these newly minted $pumpBTC tokens are transferred back to the user.

<figure><img src="/files/4FwmCXZ6UWyEpY0y4bZ5" alt=""><figcaption></figcaption></figure>

## Burn Process

Burning in the context of PumpBTC refers to the process of redeeming Bitcoin in exchange for $pumpBTC tokens. This operation is essentially the reverse of the minting process and plays a crucial role in maintaining the system's equilibrium and token integrity.

<figure><img src="/files/Cj82mfnYcKPpQe84xS63" alt=""><figcaption></figcaption></figure>