Overcollateralized borrowers deposit funds into Reflexer and receive RAI stablecoin.

Reflexer is a non-custodial stablecoin protocol built on Ethereum. Reflexer was founded by Ameen Soleimani & Stefan Ionescu and launched in 2020.

FLX tokenholders own and govern the protocol. They currently collect the total interest paid by borrowers (revenue). Reflexer’s investors include Paradigm, Variant Fund, Pantera Capital, etc.

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Reflexer

# Reflexer Earnings Methodology

## 1. Overview

Reflexer earnings measures the net profitability of the RAI stablecoin protocol by calculating revenue from stability fees minus expenses from token incentives. This metric answers how much the protocol earns after accounting for the cost of incentivizing users through FLX token rewards and negative stability fee subsidies. The calculation follows a simple earnings formula: Earnings = Revenue - Expenses, where revenue comes from positive stability fees charged on outstanding debt and expenses include both direct token rewards and the cost of subsidizing users when stability fees are negative.

## 2. Data sources

- **Reflexer protocol events**: Parsed Ethereum blockchain events from the Reflexer v1 protocol including debt modification events (`SAFEEngine_ModifySAFECollateralization_event`), stability fee parameter updates (`TaxCollector_ModifyParameters_event`), staking reward claims (`StakingRewardsEscrow_ClaimRewards_event`), and merkle distributor claims (`MerkleDistributor_Claimed_event`)
- **Token metadata**: Token symbol and decimal information for RAI stablecoin (address `0x03ab458634910aad20ef5f1c8ee96f1d6ac54919`) and FLX governance token (address `0x6243d8cea23066d098a15582d81a598b4e8391f4`)
- **End-of-day price feeds**: Daily USD price data for RAI and FLX tokens to enable currency conversion
- **Protocol configuration**: Hardcoded values including WETH collateral type identifier (`0x4554482d41000000000000000000000000000000000000000000000000000000`) and date filters for specific event types

## 3. Step-by-step calculation

### Component A: Outstanding RAI supply calculation
- **Purpose**: Determines the total amount of RAI stablecoin debt outstanding in the protocol, which serves as the base for all stability fee calculations
- **Logic**: Extracts `globalDebt` values from `SAFEEngine_ModifySAFECollateralization_event` logs filtered to WETH collateral type. Converts amounts from Reflexer's internal scaling (divided by 10^27) to standard token units. Aggregates events to daily level by taking the average debt value per day, then applies forward-fill logic to ensure continuous daily data with no gaps
- **Key fields**: `globalDebt` (total protocol debt), `collateralType` (filtered to WETH), `block_timestamp` (for daily aggregation)

### Component B: Stability fee tier calculation  
- **Purpose**: Calculates the annual stability fee rates applied to outstanding debt, handling both positive (revenue-generating) and negative (subsidy) rates
- **Logic**: Processes `TaxCollector_ModifyParameters_event` logs to extract stability fee rates. Converts per-second rates stored as `data` field from Reflexer's internal format (scaled by 10^27) to annual percentage rates using the formula: power((data / 10^27), seconds_per_year) - 1. Aggregates to daily level taking average rate per day, then forward-fills to ensure continuous rate data
- **Key fields**: `data` (per-second stability fee rate), `block_timestamp` (for daily aggregation)

### Component C: Revenue from positive stability fees
- **Purpose**: Calculates daily revenue generated when stability fees are positive (protocol charges borrowers)
- **Logic**: Joins outstanding RAI supply with stability fee tiers for each day. Filters to periods where stability fee rates are greater than or equal to zero. Calculates daily revenue as: outstanding_supply × stability_fee ÷ 365. Converts resulting RAI amounts to USD using end-of-day price feeds
- **Key fields**: `outstanding_supply` (from component A), `stability_fee` (from component B, filtered ≥ 0)

### Component D: Direct token incentive expenses
- **Purpose**: Captures the cost of FLX token rewards distributed to users through staking and merkle distributor programs
- **Logic**: Aggregates `amount` values from both `StakingRewardsEscrow_ClaimRewards_event` and `MerkleDistributor_Claimed_event` logs. Filters merkle distributor events to dates after April 15, 2021. Sums daily token distributions and applies decimal corrections for FLX tokens, then converts to USD using end-of-day price feeds
- **Key fields**: `amount` (FLX tokens distributed), `block_timestamp` (for daily aggregation)

### Component E: Negative stability fee expenses  
- **Purpose**: Calculates the cost when stability fees are negative, representing subsidies paid to borrowers
- **Logic**: Uses same outstanding supply and stability fee tier data as revenue calculation, but filters to periods where stability fee rates are less than zero. Calculates daily subsidy cost as: outstanding_supply × |negative_stability_fee| ÷ 365. Results are treated as expenses (positive values representing costs to the protocol)
- **Key fields**: `outstanding_supply` (from component A), `stability_fee` (from component B, filtered < 0)

### Final aggregation
- **Combining components**: Total expenses equal the sum of direct token incentives (component D) and negative stability fee subsidies (component E). Revenue comes directly from component C (positive stability fee revenue)
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds, with RAI amounts converted for revenue calculations and FLX amounts converted for direct incentive expenses
- **Time aggregation**: All components are aggregated to daily boundaries using UTC timestamps, with intraday events averaged or summed as appropriate for each data type
- **Final calculation**: Daily earnings = daily revenue from positive stability fees - (daily direct token incentives + daily negative stability fee subsidies). Missing dates are handled using forward-fill strategy to maintain continuous time series data

*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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