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 Expenses Methodology

## 1. Overview

Expenses measures the total cost incurred by Falcon Finance to incentivize protocol participants and maintain operations. For this protocol, expenses are defined by the distribution of yield to supply-side users. This includes staking rewards distributed to holders of Falcon Finance sUSDf and yield payments made to NFT stakers. These distributions represent the protocol's cost of capital and incentives for maintaining liquidity.

## 2. Data sources

- **Blockchain events**: `FeesCollected` events from `FalconPosition` contracts and ERC-20 token transfers, covering Ethereum
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Falcon Finance sUSDf staking rewards tracking

- **Purpose**: To identify yield distributed to users staking in the reward pool.
- **Logic**: ERC-20 transfers of Falcon USD to the staking rewards distributor contract are identified. These transfers represent the flow of yield to the distributor for subsequent allocation to Falcon Finance sUSDf holders.
- **Key fields**: `value` (transfer amount), `to_address` (staking rewards distributor), `token_address` (Falcon USD).

### Component B: NFT staking yield extraction

- **Purpose**: To capture yield earned by NFT positions within the protocol.
- **Logic**: `FeesCollected` events are parsed from `FalconPosition` contracts. The amount of yield is extracted from the events, where values are recorded in shares of Falcon Finance sUSDf.
- **Key fields**: `amount` (yield quantity in shares), `block_timestamp` (event timing).

### Component C: USD conversion and final aggregation

- **Purpose**: To normalize all identified costs into a standardized USD-denominated metric.
- **Logic**: All identified reward distributions and yield payments are aggregated with daily granularity. Amounts are normalized by decimal precision based on asset metadata and converted to USD using end-of-day price feeds for Falcon USD and Falcon Finance sUSDf. Total expenses are calculated as the sum of these cost-of-revenue components, reflecting that the protocol treats 100% of distributed yield as an operating expense.

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

Total project operating and incentive expenses.

Falcon FinanceFF

Expenses

Expenses

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