Minting & redeeming eTokens
eTokens trade through an RFQ (request-for-quote) marketplace rather than an order book or AMM: you ask for a price, a market maker answers with a signed firm quote, and settlement is atomic onchain. The PSM is the second, maker-free door.
The RFQ flow
The guardrails on every settlement
| Check | Rule | Protects against |
|---|---|---|
| Firm quote | EIP-712 signed, seconds-scale expiry, single-use, bound to this market and chain | Quote replay and cross-venue reuse |
| Settle band | Quoted price must be within ±5% of the current mark | A compromised quote key settling at absurd prices |
| Mark freshness | New exposure cannot open against a mark older than 1 hour | Settling against stale prices |
| Solvency check | Net exposure must stay under the global utilization cap after the mint | Issuance outrunning the collateral that insures it |
| Issuance cap | Per-asset outstanding value limit ($1M at launch) | Concentration in any single asset |
Costs
There is no protocol fee to mint or redeem. The maker's bid-ask spread is the entire trading cost, and it is the maker's entire compensation. Limit (resting) orders are supported: the input sits in escrow, fillable by makers or PSM fillers, cancellable any time.
After the mint: the backfill
The maker who filled a mint uses the buyer's USDG to purchase the real wrapper token and deposits it into the asset's Reserve Vault. The new eToken ends up matched 1:1 by real stock, and the LP collateral that briefly insured the gap is freed. See Backing & solvency.
Redeeming
Redeeming is the same flow in reverse: a maker quotes, you settle, tokens burn, USDG arrives. If no maker fills, the exit waterfall guarantees you are never trapped: the PSM redeems in kind instantly, and a claim mechanism can ultimately force-execute against LP collateral at the oracle price.