If a user mints 500 ZCHF against a collateral with a reserve ratio of 20% and a fee of 5%, the following will happen on the active side: m will increase by 500 (because that is how much they need to repay) and r will increase by 125 (because that is how much they put into the borrowers reserves and paid in fees). On the passive side, z will increase by 500 (because that is how is being minted), b will increase by 100 (because that is how much the system needs to return to the user when the position is repaid), and equity e will increase by 25, as the fee is never returned and now belongs to the Frankencoin system. So in this case, minting 500 Frankencoins counter-intuitively expands the balance sheet by more than that, namely 625 ZCHF. The collateral provided by the user is outside the balance sheet and does not appear here. Even though it is locked, it still belongs to the user.