> For the complete documentation index, see [llms.txt](https://docs.mooncake.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mooncake.fi/core-mechanisms/minting-redemption-of.../funding-token.md).
# Funding Token
As a holder of Funding Positions, all positions are stored in the Funding Vault, and users receive Funding Tokens minted to their addresses.
#### Minting Process
1. A trader deposits Underlying Tokens.
2. The tokens are split into a Funding Position and a Leveraged Position.
3. The Leveraged Position enters the AMM and is swapped into additional Funding Positions based on the current exchange rate.
4. The trader’s holdings are now entirely in Funding Positions.
5. These Funding Positions are deposited into the Funding Vault, and the trader receives corresponding Vault Tokens (Funding Tokens).
#### Redemption / Selling Process
When a trader redeems or sells Funding Tokens, the process works as follows:
1. The trader’s Funding Tokens represent a share of the Funding Positions stored in the vault.
2. A portion of these Funding Positions is swapped into Leveraged Positions via the AMM.
3. The resulting Leveraged Positions are combined with the remaining Funding Positions to reconstruct the Underlying Token.
4. At this point, the Funding Token is fully converted back into the Underlying Token, which is returned to the trader.
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