> For the complete documentation index, see [llms.txt](https://docs.universal.xyz/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.universal.xyz/docs/introduction-to-universal/universal-protocol-overview/redemption.md).

# Redemption

<figure><img src="/files/4uYsWXjhDY7A4IhNPmDF" alt=""><figcaption><p>Universal Token Redemption Flow</p></figcaption></figure>

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**.