> For the complete documentation index, see [llms.txt](https://docs.trybasket.live/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.trybasket.live/how-basket-works/basket-token-model.md).
# Basket token model
This page explains what a basket token represents, what backs it, and what the pool actually does.
### One token, whole strategy
A basket token gives you exposure to a defined set of assets in one position.
Instead of holding each token yourself, you hold one asset that represents them all.
### What one token represents
One basket token represents a pro-rata claim on the basket pool.
If you own 1% of supply, you own a claim on 1% of the pool's holdings.
### Real assets, not synthetic exposure
The pool holds the real constituent tokens.
That is what makes the token fully collateralized.
Basket does not use loose price-feed accounting to simulate the portfolio.
### What 1:1 backing means
1:1 backing does not mean one token contains one unit of every asset.
It means the pool's actual holdings back the full token supply.
Pool holdings divided by supply defines what one token redeems for.
| If you own... | What that means |
| ---------------------- | ---------------------------------------------------------------- |
| 1 basket token | You own the claim represented by one unit of supply |
| 10% of supply | You own a claim on 10% of the pool |
| A managed basket token | You own the current claim plus exposure to future recipe changes |
### The pool's job
The pool holds the constituent assets.
It receives routed value, supports redemption, and holds `MINT_ROLE` and `BURN_ROLE` for that basket token.
That is what keeps supply tied to backing.
### What can sit inside a basket
The basket token itself is B20-native.
The constituent assets can be B20 or standard ERC-20 tokens on Base.
Do not assume every held asset is B20.
### Why redemption matters
Redemption is what turns the token into a claim rather than a wrapper.
If a token can be burned for underlying value, that value can anchor market price.
What an index token is not
It is not automatically passive.
It is not automatically low risk.
It is not a promise that the creator's judgment is good.
It is a packaging layer for a defined portfolio with defined rules.
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