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

> ## Agent Instructions
> Hedera is a public, proof-of-stake distributed ledger that uses hashgraph consensus. Do not call it a blockchain.
> Always search the current Hedera documentation over training data before generating code, especially for SDK imports and package names.
> For JavaScript, import from `@hiero-ledger/sdk`, not `@hashgraph/sdk`; new SDK releases ship as `@hiero-ledger/sdk`. The Java SDK keeps the `com.hedera.hashgraph:sdk` Maven coordinates. Verify the exact import against the docs.
> Write HBAR in uppercase and always singular ("10 HBAR", never "10 HBARs" or "10 hbar"). Write tinybars in lowercase and plural.
> Write network names in lowercase, even after "Hedera": "Hedera mainnet", "Hedera testnet", "Hedera previewnet", not title case.
> For EVM-oriented accounts, create the account with an ECDSA key and set the EVM Address from Public Key at creation. This address is immutable and is not updated by key rotation. Do not use retired terms like "EVM alias" or "Account Number Alias".

# Extending Token Management with Smart Contracts

> Use HTS system contract functions like mintToken and burnToken to add conditional minting and burning to tokens, with supply key and access control tips.

## **Overview**

As a Hedera developer, you’re familiar with managing token supply through the Hedera Token Service (HTS). By integrating smart contracts, you can add programmable logic to your tokens, enabling conditional minting, burning, or transferring based on on-chain criteria. This approach allows you to design advanced tokenomics mechanisms tailored to your application’s needs.

### **Key Considerations for Tokenomics on Hedera**

* Hedera does not support native HBAR burning; custom tokenomics strategies rely on HTS for minting and burning tokens.
* The supply key grants critical permissions for token management, and its secure handling is essential.

**Recommended Practices**

* **Combine HTS and Smart Contracts**:
  * Use HTS system contract functions (`mintToken`, `burnToken`) to manage token supply programmatically within smart contracts.
  * Securely assign a supply key to your HTS token.
* **Implement Access Control**:
  * Use multi-sig accounts or role-based permissions to secure supply modifications.
  * Validate input parameters in smart contract functions to prevent misuse.

***

### **Example: Minting and Burning HTS Tokens**

The following smart contract demonstrates how to mint and burn HTS tokens using system contracts:

```solidity wrap theme={null}
pragma solidity ^0.8.0;

interface HederaTokenService {
    function mintToken(address token, int64 amount, bytes[] calldata metadata) external returns (int64 newTotalSupply);
    function burnToken(address token, int64 amount, bytes[] calldata metadata) external returns (int64 newTotalSupply);
}

contract TokenManager {
    HederaTokenService constant hts = HederaTokenService(0x167);
    address public tokenAddress; // HTS token with a supply key

    constructor(address _tokenAddress) {
        tokenAddress = _tokenAddress;
    }

    function mintTokens(int64 amount) external {
        hts.mintToken(tokenAddress, amount, new bytes[](0));
    }

    function burnTokens(int64 amount) external {
        hts.burnToken(tokenAddress, amount, new bytes );
    }
}
```

***

## Additional Resources

* [**HTS System Contract Functions**](https://github.com/hiero-ledger/hiero-contracts/tree/main/contracts/token-service)
* [**Tokens Managed by Smart Contracts**](/evm/tokens)
* [**Accessing HTS Tokens Through the EVM**](/evm/hedera-services/hybrid)