# How does Agio work

Agio operates as a multi-chain hedging protocol, with a primary focus on Arbitrum, empowering users to hedge against losses by facilitating the exchange of their tokens for covered equivalents, which closely mirror the original assets while guaranteeing 100% coverage against losses at the time of acquisition.

## Fee swaps

Our platform charges a fee for token swaps between standard tokens and their corresponding ctokens (e.g., ETH to cETH). Initially, these fees are determined by our Market Makers, but over time, users will have the opportunity to trade their coverages, fostering a liquid market where fee rates are set by market demand.

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As an Automated Market Maker (AMM), AGIO sets fee rates based on market dynamics. Initially, our team serves as the market maker for the AMM. However, users have the flexibility to exchange their coverage tokens for other coverage tokens or sell their ctokens ahead of schedule (prior to the expiration of the one-year coverage period) to other users.

## How does the coverage works ?

Ctokens come with a fixed coverage period of one year, starting from the moment users mint their ctokens by exchanging their original tokens for their covered counterparts. Following this one-year period, users can swap back their ctokens for the original tokens at a 1:1 ratio without incurring any fees. Additionally, users will receive their coverage in $AUSD, our stablecoin for the ecosystem, which is designed to mirror the value of the US dollar (for more details, please refer to our $AUSD page).

