> ## Documentation Index
> Fetch the complete documentation index at: https://docs.berachain.com/llms.txt
> Use this file to discover all available pages before exploring further.

# HONEY Stablecoin

> Minting, redemption, collateral, and basket mode.

`$HONEY` is soft-pegged to the US Dollar and fully collateralized. It is Berachain's native stablecoin, providing a stable means of exchange within the ecosystem and beyond.

## Using and minting `$HONEY`

`$HONEY` serves the same role as other stablecoins — payments, remittances, hedging against volatility — and is widely used across Berachain DeFi as a base trading pair and lending asset. Minting and redeeming `$HONEY` against collateral happens through [honey.berachain.com](https://honey.berachain.com). You can also acquire it by swapping on BEX or another exchange.

The lifecycle is straightforward: deposit a whitelisted collateral asset to mint `$HONEY`, use it however you like, and redeem it for collateral when you're done. Minting and redemption rates are configurable per collateral asset by governance.

### Collateral assets

The following assets can be used as collateral to mint `$HONEY`:

* `$USDC`
* `$BYUSD` (`$pyUSD`)
* `$USDT0`
* `$USDE`

New collateral assets can be added through governance.

## `$HONEY` Architecture

A flow diagram of the `$HONEY` minting process and associated contracts is shown below:

```mermaid actions={false} theme={null}
graph LR
    User[User] -->|"collateral"| HoneyFactory[HoneyFactory]
    HoneyFactory -->|"HONEY"| User

    HoneyFactory -->|"collateral"| USDCVault[USDC Vault]
    USDCVault -->|"shares"| HoneyFactory

    HoneyFactory -->|"collateral"| BYUSDVault[BYUSD Vault]
    BYUSDVault -->|"shares"| HoneyFactory

    HoneyFactory -->|"collateral"| USDT0Vault[USDT0 Vault]
    USDT0Vault -->|"shares"| HoneyFactory

    HoneyFactory -->|"collateral"| USDEVault[USDE Vault]
    USDEVault -->|"shares"| HoneyFactory
```

### `$HONEY` vaults

`$HONEY` is minted by depositing eligible collateral into specialized vault contracts. Each vault is specific to a particular collateral type. Mint and redeem rates are configured independently per collateral asset — see [Fees](#fees) for the current values.

### HoneyFactory

At the heart of the `$HONEY` minting process is the [`HoneyFactory`](https://berascan.com/address/0xA4aFef880F5cE1f63c9fb48F661E27F8B4216401) contract (same address on mainnet and Bepolia). This contract acts as a central hub, connecting all the different `$HONEY` Vaults and is responsible for minting new `$HONEY` tokens.

As shown in the diagram, your deposits are routed through the `HoneyFactory` contract to the appropriate vault. The `HoneyFactory` custodies the shares minted by the vault (corresponding to your deposits) and mints `$HONEY` tokens to you.

## Depegging and basket mode

Basket Mode is a safety mechanism that activates when collateral assets become unstable. It affects both minting and redemption of `$HONEY` in specific ways:

**Redemption:**

* When ANY collateral asset depegs, Basket Mode automatically activates
* In this mode, you can't choose which asset you redeem your `$HONEY` for
* Instead, you redeem for a proportional share of ALL collateral assets in the basket
* For example, if you redeem 1 `$HONEY` token with Basket Mode active, you'll get some of each collateral asset based on their relative proportion as collateral

**Minting:**

* Basket Mode for minting is considered an edge case that only occurs if ALL collateral assets are either depegged or blacklisted. Depegged assets cannot be used to mint `$HONEY`
* In this situation, to mint `$HONEY`, you must provide proportional amounts of all collateral assets in the basket, rather than choosing a single asset
* If one asset is depegged, you can mint only with the other asset

## Gasless transfers and approvals

`$HONEY` supports two ERC-20 extensions that allow transactions to be submitted by a third party on behalf of the token holder, removing the need for the holder to pay gas:

* **EIP-2612 `permit`** — lets a holder sign an off-chain message authorizing a spender allowance. A relayer or contract can then submit the permit on-chain, so the holder never sends a transaction. This is the same interface used by USDC, DAI, and most modern ERC-20 tokens.
* **EIP-3009 `transferWithAuthorization` / `receiveWithAuthorization`** — lets a holder sign an off-chain message authorizing a one-time transfer to a specific recipient. The recipient (or a relayer) submits it on-chain. Each authorization includes a unique nonce to prevent replay. This also enables support for [X402](https://www.x402.org/) payment-gated content.

Both extensions use [EIP-712](https://eips.ethereum.org/EIPS/eip-712) typed structured data for signatures.

## Fees

Fees are collected from minting and redeeming `$HONEY`. The current fee structure is the following:

| Stablecoin | Mint Fee | Redeem Fee |
| ---------- | -------- | ---------- |
| USDT       | 0.1%     | 0%         |
| byUSD      | 0.1%     | 0%         |
| USDC       | 0%       | 0.05%      |
| USDe       | 0%       | 0.05%      |

Let's walk through minting and redeeming `$HONEY` with `$USDC`:

**Minting:**

* User deposits `1,000 $USDC`
* Receives `1,000 $HONEY` (0% fee)
* No fees collected

**Redeeming:**

* User redeems `1,000 $HONEY` for `$USDC`
* Receives `999.5 $USDC` (0.05% fee = 0.5 \$USDC)
* The `0.5 $USDC` fee is split between polFeeCollector (BGTIncentiveFeeCollector, routing fees into sWBERA yield) and feeReceiver based on governance-configured polFeeCollectorFeeRate