# Introduction

**$IOU**: The supply of the $IOU token is dynamic, starting from zero and having no preset upper limit. The supply grows organically as users interact with the system. As borrowers deposit collateral and incur debt within the Xloop Finance system, new $IOU tokens are minted to reflect this. This ensures that the amount of $IOU tokens always accurately represents the total debt within the system. The dynamic supply feature of $IOU also allows for greater flexibility and scalability, enabling Xloop Finance to adapt to changing market conditions and user demands.

**$XDC**: The $XDC token is minted initially to establish the required liquidity pool. The total supply of $XDC does not have a cap, as it increases with additional tokens being minted by borrowers using $IOU as collateral. Furthermore, the $XDC supply can decrease, given that tokens are subject to burn during the redemption process. This dynamic supply mechanism allows for adaptive responses to shifts within the ecosystem.

**$XLOOP**: This token has an initial total supply of 1 billion tokens, there is no fixed upper limit for the $XLOOP supply. The total supply could potentially expand under certain circumstances, such as in the case of redemption events, which may trigger additional $XLOOP minting. Equally significant is the mechanism that allows $XLOOP tokens to be burned during the minting of $XDC tokens, particularly when the market confidence on $XDC is high. This capability to burn $XLOOP tokens contributes to positive market expectations.


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