# Minting

## What is minting?&#x20;

**Minting is the secondary value accrual strategy of DAO.Finance.** When users mint FAO tokens, they are actually selling their assets in order to buy a bond from the protocol. Minting Actions are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the minter with terms for a trade at a future date. These terms include a predefined amount of **FAO** the minter will mint and the time when vesting is complete. The bond becomes redeemable as it vests. I.e. in a 5-day term, after 2 days into the term 40% of the rewards can be claimed.

**Bonding is an active, short-term strategy.** The price discovery mechanism of the secondary bond market renders mints discounts more or less unpredictable. Therefore minting is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

**Allowing users to purchase bonds through bonding allows Dao.Finance to accumulate its own liquidity.** We call our own liquidity [**POL**](https://docs.dao.finance/faq#why-is-pol-important). More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since Dao.Finance becomes its own market, on top of additional certainty for **FAO** investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.
