# Token Model

The Safura protocol includes a Ratcheting Automated Market Maker (RAMM) for minting and redeeming $SAFU.

RAMM is a two-pool system built on the Capital Pool, ensuring claims are payable during major loss events. It balances **$S (Sonic)** inflow/outflow, $SAFU staking, investment allocations, and asset-liability management through an automated mechanism.

Members can use assets in the Capital Pool to underwrite cover products and vote on investment allocations.

**Ratcheting Automated Market Maker (RAMM)**[​](https://docs.nexusmutual.io/protocol/nxm-token/token-model#ratcheting-automated-market-maker-ramm)

The RAMM model consists of two virtual one-sided Uniswap v2-style pools: Below Pool and Above Pool. Both pools share a defined amount of **$S** liquidity paired with virtual $SAFU reserves.

**Below Pool:**

* Handles swaps below the Book Value.
* $SAFU sold is burned; **$S** is distributed.
* Can only redeem $SAFU when the spot price is less than or equal to the Book Value.

**Above Pool:** 

* Handles swaps above the Book Value.
* **$S** is added to the pool, and $SAFU is minted in return.
* Can only purchase $SAFU when the spot price is greater than or equal to the Book Value.