> For the complete documentation index, see [llms.txt](https://prodds.gitbook.io/prodds/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://prodds.gitbook.io/prodds/tokenonics/utility-token-usdrdm.md).

# Utility Token - $RDM

$RDM is the core utility token within the Prodds Ecosystem, designed to power Prodds Predict, Prodds Arena, and other platform functionalities. It has a unique backing mechanism to maintain stability and usability, ensuring that $RDM remains valuable and accessible for users engaging with the platform.

{% embed url="<https://www.youtube.com/watch?v=AwIwnJHU7-E>" %}

## $RDM Backing Mechanism

The value of $RDM is supported by a backing mechanism split into two components: a Stable Reserve and a Variable Reserve. This reserve structure is designed to balance price stability with dynamic growth potential, benefiting both everyday users and long-term stakeholders.

### Stable Reserve (90%)

This portion of the reserve is held in stablecoins, primarily **$USDC**. The Stable Reserve ensures that $RDM maintains a base level of stability, minimizing price volatility and making it a reliable token for users on the platform. Eligible $PRD holders can adjust the portion between 80% to 95% via DAO Voting.

```python
StableReserveAddress = ""
```

### Variable Reserve (10%)

The Variable Reserve is held in a mix of $POL (Polygon’s native token) and $PRD (Prodds’ governance token). This reserve supports user transactions by ensuring sufficient $POL is available to cover gas fees on the Polygon network. Additionally, the inclusion of $PRD in the Variable Reserve fosters a consistent demand for the governance token, aligning with Prodds’ long-term ecosystem growth strategy. Eligible $PRD holders can determine the backing ratio between $POL and $PRD.

```python
VariableReserveAddress = ""
```

## How $RDM is Minted?

$RDM is minted on a 1:1 basis with $USDC. When users transfer $USDC to acquire $RDM, the <mark style="color:blue;">**$RDM Minting Contract**</mark> mints an equivalent amount of $RDM, ensuring each token is backed by assets in the <mark style="color:blue;">**Stable Reserve**</mark> and <mark style="color:blue;">**Variable Reserve**</mark>.&#x20;

The $USDC received is directed to the Stable Reserve to provide stable backing for $RDM. A portion of this reserve is then swapped into $POL and $PRD, which are allocated to the Variable Reserve. The $RDM Mint Smart Contract is <mark style="color:blue;">**audited by Hashlock**</mark> to further secure this process, providing users with a safe and transparent system.