> For the complete documentation index, see [llms.txt](https://whitepaper.nuon.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://whitepaper.nuon.fi/architecture/minting-caps-equilibrium.md). # Minting Caps Equilibrium To maintain the sustainability of NUON's yield-generating mechanisms, it is essential to balance the demand for yield-bearing protocols with the supply of NUON tokens. Imposing limits on NUON minting helps ensure that the yield rate remains sustainable over time. Consider the finite pool of borrowers willing to participate in a lending protocol like AAVE at a given interest rate. If the supply of NUON tokens representing loans exceeds the demand from borrowers, the yield potential of the protocol may be diluted. Similarly, in decentralized exchanges (DEX), the liquidity between two assets is limited. Increasing the supply of one asset could reduce the relative yield of the trading pair. While the idea of unlimited NUON minting might seem attractive, it is important to recognize the finite nature of yield sources. To consistently outpace inflation, strategic constraints on minting may be necessary. This is especially important when considering the risk preferences of users who have veto power over yield-bearing strategies. In the initial phases, it is advisable to keep these minting restrictions either uncapped or set at relatively high levels. This approach allows for the assessment of the protocol's impact on underlying yield sources and enables iterative adjustments based on market dynamics and user behavior insights. By strategically managing the minting caps, Nuon can ensure that the yield rates remain attractive and sustainable, providing reliable returns to NUON holders while maintaining the protocol's overall stability. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://whitepaper.nuon.fi/architecture/minting-caps-equilibrium.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.