Redemption

Token redemption involves reducing the supply of Universal tokens by redeeming them for the underlying assets. This process can only be initiated by merchant addresses.

Universal Token Redemption Flow

To redeem Universal tokens, the Merchant must call the burn function in the smart contract, specifying the exact amount of tokens to be burned.

Redemption Process:

1. When the burn function is executed:

   • The specified token amount is deducted from the Merchant’s on-chain Universal token balance.

   • The total supply of Universal tokens is reduced accordingly.

2. Upon successful burning:

   • The Merchant exchanges the burned Universal tokens for an equivalent amount of the underlying asset.

   • The total circulating supply of Universal tokens decreases, ensuring a fully collateralized and transparent redemption process.