# How it Works ## w**cgUSD 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) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://wiki.cygnus.finance/whitepaper/cygnus-omnichain-liquidity-validation-system-lvs/cygnus-lvs-integration/cgusd-v1/token-and-contract/wcgusd/how-it-works.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.