How it Works

wcgUSD contract overview

When wrapping cgUSD to wcgUSD, the desired amount of cgUSD is locked on the WcgUSD contract balance, and the wcgUSD is minted according to the share bookkeeping formula.

When unwrapping, wcgUSD gets burnt and the corresponding amount of cgUSD gets unlocked.

Thus, the amount of cgUSD unlocked when unwrapping is different from what has been initially wrapped (given a rebase happened between wrapping and unwrapping cgUSD).

wcgUSD shortcut

Note, that the WcgUSD contract includes a shortcut to convert ether to wcgUSD under the hood, which allows you to effectively skip the wrapping step and stake ether for wcgUSD directly. Keep in mind that when using the shortcut, the staking rate limits still apply.

Rewards accounting

Since wcgUSD represents the holder's share in the total amount of Cygnus-controlled ether, rebases don't affect wcgUSD balances but change the wcgUSD price denominated to cgUSD.

Basic example

User wraps 1 cgUSD and gets 0.9803 wcgUSD (1 cgUSD = 0.9803 wcgUSD) A rebase happens, the wcgUSD price goes up by 5% User unwraps 0.9803 wcgUSD and gets 1.0499 cgUSD (1 cgUSD = 0.9337 wcgUSD)