# How to redeem $RDM?

$RDM holders can redeem their tokens for assets backed by the Stable Reserve and Variable Reserve via the $RDM Redemption Smart Contract, audited by Hashlock. Each $RDM token is supported by reserves in USDC, POL, and PRD, ensuring stability and value within the Prodds ecosystem.

When redeeming, you’ll receive a proportional amount of each backed asset (USDC, POL, and PRD) based on reserve holdings. The amount of each asset you can redeem is calculated with the following formula, applied separately for each type:

$$
\text{Redeemable Assets} = \text{Total Reserve Assets} \times \frac{\text{Your } RDM}{\text{Total } RDM \text{ in Circulation}}
$$

**Definitions**

* **Total Reserve Assets:** The quantity of a specific asset (USDC, POL, or PRD) held in the reserve.
* **Your $RDM:** The amount of $RDM you are redeeming.
* **Total $RDM in Circulation:** The entire amount of $RDM currently held by all users on the platform.

<details>

<summary>Example:</summary>

Your $RDM = 1,000\
Total $RDM in Circulation = 200,000\
$POL in Variable Reserve = 800,000\
$PRD in Variable Reserve = 400,000\
$USDC in Stable Reserve = 180,000\
\
Since your $RDM represents 0.5% of each reserve, you would receive:

800,000 $POL x 0.5% = 4,000 $POL\
400,000 $PRD x 0.5% = 2,000 $PRD\
180,000 $USDC x 0.5% = 900 $USDC

</details>

Under the $RDM backing mechanism, each $RDM is guaranteed to be backed by at least 90% in $USDC, providing strong stability and value security.

All $RDM tokens redeemed are permanently burned. This burn mechanism ensures that the total circulating $RDM supply remains fully backed by assets in the Stable and Variable Reserves, maintaining stability and confidence in the $RDM token’s value.
