> For the complete documentation index, see [llms.txt](https://docs.sherpa.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.sherpa.trade/sherpaearn-vault/sherpausd.md).

# sherpaUSD

### Purpose & Importance

An internal "wrapper" token that is always 1:1 against `USDC`, representing the vault's backing reserves.  The exact supply of `sherpaUSD` *(plus pending withdrawals)* is equal to the total value locked in the vault (in `USDC` terms).  `SherpaUSD` is used purely as an accounting asset, and does not interface with users under normal contexts.

**Actions & Their Effects On sherpaUSD Supply**

* Depositing `USDC` mints `sherpaUSD` on the same network the user deposited onto and then transfers to the vault contract.
* Withdrawing `USDC` transfers `sherpaUSD` out of the vault contract and burns it on the same network they withdrew from. 
* Progressing the cycle with positive yield will mint `sherpaUSD` at a quantity equal to the yield earned on only the primary network.
* [Rebalancing](/sherpaearn-vault/multichain-architecture/rebalancing.md) will burn `sherpaUSD` on the debit network and mint the exact amount on the credit network.