Yield in DeFi often involves layers of complexity, but Falcon Finance keeps it relatively clean with sUSDf. By staking USDf into an ERC-4626 vault, users get sUSDf that accrues value as the protocol profits. This piece breaks down the exact calculation, daily distribution process, and how ERC-4626 ties it all together—ideal if you're looking to understand the nuts and bolts.
Everything revolves around the vault's exchange rate: How much USDf one sUSDf is worth. The formula is precise:
sUSDf-to-USDf Value = (Total Staked USDf + Total Accrued Rewards as USDf) / Total sUSDf Supply
When depositing USDf to mint sUSDf@Falcon Finance
sUSDf Received = Deposited USDf / Current Value
This ensures you always get a fair share proportional to the vault's current state.
Yield accrual starts with the protocol's daily performance. Strategies generate returns, which are converted to USDf equivalents and minted fresh. Rather than distributing these as separate tokens, Falcon deposits a large portion directly into the vault. This increases the numerator in the formula above without changing the denominator (sUSDf supply for classic yield), raising the value per share.
The remaining minted USDf might go to boosted lock-ups (as extra sUSDf at unlock) or other allocations like insurance.
For classic sUSDf holders: No action needed. The rate creeps up daily, and unstaking burns sUSDf for USDf at the latest rate, capturing everything accrued.
Example: Total vault has 1 million USDf staked, 1 million sUSDf outstanding—rate 1.0. Protocol earns yield minting 10,000 new USDf, deposits it: Now total assets 1.01 million, rate 1.01. Every sUSDf holder benefits equally.
Boosted yields use NFTs for locks, getting discrete additions at maturity#falconfinance $FF for higher rates.
ERC-4626 standardizes this: Functions like previewDeposit show expected sUSDf before staking, convertToShares does the math, and totalAssets reveals the vault's backing for transparency.
This setup avoids manual claiming, reduces gas, and keeps yields verifiable on-chain. It's a solid educational model for how modern vaults distribute growth fairly and efficiently.
In varying market conditions, the rate's growth reflects real performance—no fluff. For users, it means staking USDf into sUSDf is a set-it-and-forget-it way to participate in the protocol's earnings.
