Seignorage is the difference between the value of money and the cost to produce it. Money is made up of coins and paper bills. Coins cost much less to make than they are worth, so the government makes a profit. Paper bills also cost less than they are worth, but not as much as coins. So when the government prints new money, it can get more money back than it costs to make the money in the first place. That's seignorage.