# Seigniorage Code

Our **seigniorage contracts, as well as peripheral contracts** like liquidation bots and token contracts, **are our own**. They are loosely based on older seigniorage protocols, but have seen so many adjustments that referral will only lead to confusion. **Our seigniorage side** of the protocol **and its token contracts** **can be updated**, so we can essentially do anything with them. the following section **discusses** the **minting** of tokens, because that is what worries most people.  We'll **describe** what we will and won’t mint tokens for and **how token minting does** or doesn’t **affect the users**.

**Esteem**

We mean to have **BetterBank** **mint Esteem** almost exclusively **through user-initiated actions** or user rewards. **The only** planned **exception** to this **is** a reserve mint for the treasury **at the start of the protocol**. **This** initial mint **is intended for** the team members **who have helped build BetterBank** in the year **before the launch.** We’ll share **these funds** to them at a pace that **won’t disrupt the Favor distribution** in the Groves. We **may also use** this minted **Esteem for marketing** purposes in the future, but not much else. We **don’t expect to** **manually mint Esteem** ever again in the future.

Since **Esteem doesn’t have an LP**, no amount of **Esteem minted** could extract funds unduly. However, an overminting could dilute the groves and/or **could be smelted into Favor tokens**, so it’s still **not** **something that should ever happen**.

**Favor**

Outside of the protocol **printing Favor to the Groves** and to the Esteem smelter, there are **a few** other instances where the **protocol mints Favor** tokens.

**BetterBank employs a contract** that **mints Favor** and then **zaps** that **Favor** into an **LP cushion** for the **treasury** to hold. The exact workings and **the reason** for it **is explained** in the **whitepaper** under the section about the **LP cushion**. This minting **is required for protocol safety,** and it **is designed** to happen in such a way that it **rarely as well as barely impacts** the **Favor** token price.

**While setting up** the protocol or a newly listed token, the team creates **Wildlands** positions on burner wallets **to start up** the **interest rate** for the **Stronghold** side and to have a **starting supply** for the Groves to calculate from. **We’ll borrow extra** funds on these wallets, **and we’ll mint Favor** to pair these funds with, **so that we have an initial LP cushion**. We then **send that LP** to a specific **treasury** and leave the **burner wallets** to their fate of eventually **getting liquidated** as interest on their debts rise. We’ll **set the wallets** intentionally **at different risk levels**, so that they don’t liquidate all at once.

Any **minting of Favor increases** the **supply**, and any increase in the supply **grows** the **daily output in the Groves**. This is **essentially beneficial** to **Wildlands** users. 

The **BetterBank team members do not sell Favor untaxed,** but **admin** access provides the ability to **whitelist wallets** so they **pay** **no tax**. Because **full decentralization remains a goal,** we could potentially work towards **decentralized** admin **access,** and history has shown that it **sometimes** is possible to **exploit** such decentralized admin systems. Any **huge untaxed sell-off** by someone with **admin access** (which would be a **rug pull**) **would** essentially **liquidate all Wildlands positions** using **that Favor type** and **bring down** the **Stronghold interest rates,** but **would not otherwise endanger** any user’s **Stronghold** funds. So **even if** in the far future **someone manages** to get **malevolent admin access**, the **Stronghold remains safe**.