Ceres
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Background
IMPROVE DEFI ECOSYSTEM
Governance
Minting

## The process of ASC minting

Ceres protocol issues more ASC for circulation by minting. The minting is controlled by smart contracts and takes place in the central bank.
When the average trading price of ASC obtained from the oracle is higher than $1.05, Ceres protocol triggers the minting process and decreases the collateral ratio when the minting is completed. For each ASC worth$1 minted, the protocol calls collateral and CRS with a total value of $1 from the central bank according to the current collateral ratio. For example, when the collateral ratio is 100%, it takes$1 worth of BUSD to mint an ASC. When the collateral ratio decreases to 50%, it means minting an ASC would take $0.5 worth of BUSD and$0.5 worth of CRS as medium, and those CRS will be burned after minting is completed. In addition, it should be noted that 0.5% seigniorage is collected by the protocol in the minting process.

## The quantity of ASC minting

The quantity of ASC minting is calculated by the minting formula, which consists of several key parameters, including the circulating supply of ASC, the value of collateral and CRS locked in the central bank, the circulation regulation coefficient, and the reserve regulation coefficient. The ASC minting curve determined by this formula is dynamic and nonlinear. When the circulating supply of ASC is low in the early stage, the minting speed is high. Then with the increase of the circulating supply, the minting speed tends to be more stable, ensuring long-term stability of ASC minting.
In addition, with the development of Ceres protocol, the minting formula can be adjusted through DAO governance. In this way, ASC minting can respond to the demand of the market and community in a timely manner.

### Minting formula

$M = Min (0.05 * C * Cp, V * Vp)$
M stands for ASC minting quantity
C stands for ASC circulating supply
V stands for value of collateral and CRS locked in the central bank
Cp stands for circulation regulation coefficient
Vp stands for reserve regulation coefficient

### Collateral ratio regulation coefficient

$CRa = CRb - 0.25\% * Rp$
CRa stands for collateral ratio after regulation
CRb stands for collateral ratio before regulation
Rp stands for collateral ratio regulation coefficient
The regulation coefficient is dynamic, with the initial value of Cp, Vp, and Rp being 1, 0.5, and 1 respectively. The regulation coefficient can be modified through proposals approved by DAO.
For example, suppose that the average trading price of ASC is $1.50, the current circulating supply of ASC is 20,000,000, the collateral ratio is 0.8, the value of the collateral and CRS locked in the central bank is$10,000,000, the circulation regulation coefficient is 0.25, the reserve regulation coefficient is 0.5, and the collateral ratio regulation coefficient is 0.5.
ASC minting quantity M is calculated according to minting formula:
$M = Min (0.05 * 20,000,000 * 0.25, 10,000,000 * 0.5)$
$M = 250,000$
The collateral ratio after regulation is calculated according to the collateral ratio regulation formula:
$CRa = 0.8 – 0.25\% * 0.5$
$CRa = 0.79875$
Quantity of collateral and CRS required for minting ASC:
$T = \frac{M * CR }{ Pc}$
$S = \frac{M *（1- CR ）}{ Ps}$
T stands for the quantity of collateral required for minting
S stands for the quantity of CRS required for minting
M stands for ASC minting quantity
CR stands for the collateral ratio
Pc stands for the price of collateral
Ps stands for the price of CRS
Assuming that the BUSD’s price is $0.995 and the CRS’s price is$3, the quantity of BUSD and CRS required for this minting can be calculated as follows:
$T= \frac{250,000 * 0.8}{ 0.9995} = 201005$
$S= \frac{250,000 * 0.2}{3} = 16666.67$