> For the complete documentation index, see [llms.txt](https://oracle-free-dollar.gitbook.io/ofd/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://oracle-free-dollar.gitbook.io/ofd/collateralised-minting.md). # 🔨Collateralised Minting When someone mints fresh Oracle Free Dollars against a collateral, we call the result a position. At the time of writing, the only smart contract that is approved to create new positions is the minting hub. The notation is inspired by portfolio theory, where a position denotes an exposure to a specific asset. In the Oracle Free Dollar system, a position always belongs to exactly one owner. Initially, this is the user that created the position, but ownership is transferrable through the standard functions of ownable contracts. The owner can deposit collateral into the position and mint Oracle Free Dollars up to a certain limit defined by the liquidation price. Anyone can challenge a position if they believe that the liquidation price is below the true value of the collateral, triggering an auction that serves to purpose of determining the market price of the collateral. Thanks to this mechanism, the Oracle Free Dollar does not depend on oracles and is very flexible with regards to the provided collateral. There are two ways to initiate a position: one can either create a completely new one with arbitrary parameters or one can clone an existing position. The former is for advanced users and not exposed in the default frontend. The latter is the faster way of obtaining Oracle Free Dollar against a collateral and supported in the default frontend. --- # 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://oracle-free-dollar.gitbook.io/ofd/collateralised-minting.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.