> ## Documentation Index
> Fetch the complete documentation index at: https://docs.share.land/llms.txt
> Use this file to discover all available pages before exploring further.

# Borrow, Mint, and Burn

> How to mint (borrow) tokens against collateral and burn them to close positions.

On Shareland, "borrowing" and "minting" refer to the same action: creating new SQFT tokens by locking collateral.

## How to Mint (Borrow)

### Step 1: Open a market

From the exchange, click any market card to open the detail panel.

### Step 2: Open the Borrow tab

In the action panel, click **Trade** then select the **Borrow** tab.

### Step 3: Enter your collateral and mint amount

Enter the amount of USDC you want to deposit as collateral and the number of SQFT tokens to mint. The panel shows your collateralization ratio. Keep it above 120% for safety.

### Step 4: Confirm

Review the details and confirm. The protocol locks your USDC and issues new SQFT tokens to your wallet.

## How to Burn (Close a Position)

### Step 1: Open the Borrow tab

Navigate to the market where you have an open mint position and open the **Borrow** tab.

### Step 2: Select Burn

Choose the amount of SQFT tokens you want to burn (return to the protocol).

### Step 3: Confirm

Review and confirm. The protocol burns your SQFT tokens and releases the corresponding USDC collateral back to your wallet.

If the SQFT price has dropped since you minted, you can buy back the tokens for less than you sold them for, keeping the difference as profit (shorting).

## Collateralization & Liquidation

To ensure the system remains solvent, all minted positions must be over-collateralized based on the **Oracle Price** (not the market trading price).

* **Minimum Collateralization Ratio (MCR):** 110%
  * This is the liquidation threshold. If your collateral value falls below 110% of your debt value (calculated using the Oracle Price), your position may be liquidated.
* **Recommendation:** We strongly recommend minting at a ratio of **120% or higher** to provide a safety buffer against real estate price movements.

<Warning>
  **Liquidation Risk:** If the **Oracle price** of the underlying real estate rises (increasing your debt value relative to your collateral), your collateralization ratio decreases. Monitor your health factor closely. Market price fluctuations on the exchange do **not** affect your liquidation risk directly, only changes in the Oracle price do.
</Warning>

## Example

* **Collateral:** You deposit \$1,100 USDC.
* **Mint:** You mint \$1,000 worth of SQFT tokens.
* **Ratio:** Your collateralization ratio is 110% (\$1,100 / \$1,000).
* This is the minimum. To be safe, you should deposit more collateral (e.g., \$1,200) or mint fewer tokens.