# How it Works

Through the rebase mechanism, cgUSD conveys the pure interest returns of U.S. Treasury bills for users. As interest is distributed, the balance of cgUSD increases accordingly. The total issuance of cgUSD remains consistent with the net value of its asset portfolio (on-chain stablecoins, the market value of U.S. Treasury Bills and interest) every New York banking day, ensuring that Cygnus Finance always supports a 1:1 redemption ratio of cgUSD to USDC. The detailed calculation formula is as follows:

<figure><img src="/files/jmn6ad0thxcNYDCQl3Y0" alt=""><figcaption></figcaption></figure>

***Y(i) represents the initial total issuance of cgUSD minted by user(i)***

***C represents USDC tokens in the US Treasury Assent Pool***

***T represents USDB represents the market value of US Treasury-Bills***

***R represents the rebased total issuance of cgUSD***

***M represents USDC tokens to receive***

***S(i) represents transaction fees***


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