Setheum distributes newly minted SETT as discounts and cashback to the users of SettPay whenever they transact with SETT or any of the SETT based tokens. This happens in the upturn of SETT. When SETT is minted in the upturn, 75% of the newly minted SETT will go back to the ecosystem through SettPay as discounts and cashback, while the other 25% goes to the Validators of the Network to buy back DNAR for burning and increasing staking rewards in proportion to the percentage of DNAR supply burnt.
So when we talked about ‘Alice’ swapping or minting 100SettUSD, we were referring to the Setheum Payment protocol in the background. This part of the Setheum Finance is responsible for distributing what comes from the Setheum Reserve (SERP), so all minted sett have to pass through this, actually are minted from it. Same way, an ecommerce site/platform can harness this beauty of Setheum to attract more users/customers with amazing discounts, the site can sell with discounts without paying for customer acquisition. And these tokens are also tradable like all other tokens on the Setheum Network and atomic swap amongst the settTokens and even between SettTokens and the SETT BasketToken is also available, this swap process is also called “Atomic Shift” on Setheum, due to the nature of how the tokens are minted, SETT is put in, and the system burns it into newly minted SettTokens, and vice versa. This takes place in a tunnel called the “Atomic Shifter” between the SERP and SettPay in Setheum Finance. So without the SERP, Sett Prototokens will not be minted from SETT, and SETT too, let alone distributed.