Falcon Finance deploys deposited collateral into delta-neutral trading strategies (funding rate arbitrage, cross-exchange arbitrage, options, statistical arbitrage) to generate yield for sUSDf holders.

Falcon Finance is a synthetic dollar protocol that issues USDf, an overcollateralized stablecoin backed by collateral managed through delta-neutral hedging strategies. Users stake USDf into sUSDf to earn yield.

Falcon Finance team, founded by Andrei Grachev (co-founder of DWF Labs). Investors include DWF Labs, World Liberty Financial, M2, Monarq.

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Falcon Finance

# Falcon Finance Earnings Methodology

## 1. Overview

Earnings measures the net value retained by Falcon Finance after all expenses are subtracted from revenue. For Falcon Finance, this metric reflects onchain profitability after accounting for yield distributions to protocol participants. Currently, 100% of the revenue generated by the protocol is distributed to Falcon Finance sUSDf holders and NFT stakers. Consequently, the cost of revenue is equal to the total revenue, resulting in net earnings of zero.

## 2. Data sources

- **Blockchain events**: `FeesCollected` events from `FalconPosition` contracts and ERC-20 `Transfer` events on Ethereum
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Falcon Finance sUSDf yield tracking

- **Purpose**: Captures yield distributed to users who stake Falcon USD.
- **Logic**: Falcon USD transfers to the staking rewards distributor address are identified. These transfers represent the yield allocated to Falcon Finance sUSDf holders.
- **Key fields**: `value` (transfer amount), `token_address` (Falcon USD address), `to_address` (staking rewards distributor).

### Component B: NFT staking yield tracking

- **Purpose**: Captures yield distributed to NFT stakers.
- **Logic**: `FeesCollected` events are parsed from `FalconPosition` contracts. These amounts are denominated in Falcon Finance sUSDf shares and represent the yield earned by NFT positions.
- **Key fields**: `in_amount` (yield in shares), `token_address` (Falcon Finance sUSDf address).

### Component C: Revenue and expense normalization

- **Purpose**: Aggregates total yield and converts values to USD.
- **Logic**: The yield components from Component A and Component B are summed to calculate total fees. Protocol revenue is set equal to 100% of these fees. Similarly, cost of revenue is defined as 100% of the fees, as all yield is distributed to supply-side participants. Amounts are normalized by decimal precision and multiplied by end-of-day asset prices.

### Component D: Net earnings calculation

- **Purpose**: Calculates the final net value retained by the protocol.
- **Logic**: Net earnings are calculated by subtracting total expenses (derived from the cost of revenue) from total protocol revenue. Because the protocol allocates all revenue to yield distributions, the resulting net earnings are zero.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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