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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Stablecoin issuers

Reflexer

# Reflexer Expenses Methodology

## 1. Overview

The Reflexer expenses metric measures the total daily cost of token incentives paid by the Reflexer protocol to users. This includes both direct FLX token rewards distributed through staking programs and merkle distributor campaigns, as well as the value of negative stability fees that effectively subsidize borrowers when the stability fee rate goes below zero. The metric answers the business question: "How much does Reflexer spend daily to incentivize protocol usage?" and provides insight into the protocol's user acquisition and retention costs.

## 2. Data sources

The calculation relies on several types of blockchain data and external feeds:

- **Protocol reward events**: Parsed Ethereum events from Reflexer's `StakingRewardsEscrow` and `MerkleDistributor` contracts that record FLX token reward claims
- **Debt tracking events**: Parsed `SAFEEngine_ModifySAFECollateralization` events that track changes in total RAI debt outstanding 
- **Parameter change events**: Parsed `TaxCollector_ModifyParameters` events that record stability fee rate adjustments
- **External price data**: End-of-day token price feeds for FLX and RAI tokens to enable USD conversion
- **Token metadata**: Token decimal information and contract addresses for accurate amount calculations

## 3. Step-by-step calculation

### Component A: Direct FLX token rewards
- **Purpose**: Captures direct token incentive payments made to users through official reward programs
- **Logic**: Extracts FLX token amounts from two event types - staking escrow reward claims and merkle distributor claims. For merkle distributor events, only includes claims made after April 15, 2021. Each event provides the recipient address, FLX token amount, and timestamp. Events are deduplicated by transaction hash and log index to ensure each reward is counted only once.
- **Key fields**: `amount` (raw FLX token amount), `token_address` (FLX contract address), `block_timestamp` (event timing)

### Component B: RAI outstanding supply calculation  
- **Purpose**: Determines the total RAI debt outstanding needed to calculate negative stability fee impacts
- **Logic**: Processes collateralization modification events that track changes in global RAI debt. Filters specifically for WETH collateral type modifications since RAI is primarily backed by WETH. Extracts the `globalDebt` field which represents total system debt in RAI. Converts from 27-decimal precision to standard token units by dividing by 10^27. Groups by day and takes daily averages, then applies forward-filling to ensure continuous time series coverage.
- **Key fields**: `globalDebt` (total system debt), `collateralType` (filtered to WETH), `block_timestamp` (event timing)

### Component C: Stability fee rate processing
- **Purpose**: Calculates annualized stability fee rates to identify when fees become negative (creating user incentives)
- **Logic**: Extracts raw stability fee parameters from tax collector modification events. Raw values are stored with 27-decimal precision as per-second rates. Converts to annualized percentage by dividing by 10^27, raising to the power of seconds per year, then subtracting 1. Groups by day and takes daily averages to smooth rate changes, then forward-fills missing dates to maintain continuous coverage.
- **Key fields**: `data` (raw per-second stability fee rate), `block_timestamp` (parameter change timing)

### Component D: Negative stability fee incentive calculation
- **Purpose**: Quantifies the value of negative interest rates as an expense to the protocol
- **Logic**: Joins daily RAI outstanding supply with daily stability fee rates. Identifies periods when stability fee rates are negative (below zero). For these periods, multiplies the outstanding RAI supply by the absolute value of the negative stability fee rate, then divides by 365 to get daily incentive amounts. This represents the daily value transferred to borrowers through below-zero interest rates.
- **Key fields**: `outstanding_supply` (daily RAI debt), `stability_fee` (daily rate), calculated daily incentive amount

### Final aggregation
- **Combining components**: Direct FLX rewards are combined with calculated negative stability fee incentives using a union operation, creating a comprehensive view of all protocol expenses. Both components share the same dimensional structure (timestamp, token address, chain, business categorizations).
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds. The conversion applies appropriate decimal corrections based on token metadata (18 decimals for FLX, 18 decimals for RAI) and multiplies by the corresponding USD price for each token on each day.
- **Time aggregation**: All calculations operate on daily boundaries using timestamp truncation to day level. Missing dates are handled through forward-filling with a zero-fill strategy, ensuring complete daily coverage without gaps.
- **Final calculation**: The final expenses value equals the sum of USD-converted direct FLX rewards plus USD-converted negative stability fee incentives for each day. This provides the total daily expense incurred by Reflexer to incentivize protocol usage through both direct rewards and subsidized borrowing costs.

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

Total project operating and incentive expenses.

ReflexerFLX

Expenses

Expenses

Competitive landscape

Chain breakdown