Yield Generation

Unlike other synthetic dollar protocols that rely solely on positive funding rate arbitrage, yield distributed to USDf stakers is derived from multiple different sources. This approach ensures consistent yields regardless of market conditions.

Strategy	Description
Positive Funding Rate Arbitrage	Falcon captures positive funding rate arbitrage by maintaining spot positions while shorting corresponding perpetual futures. The spot assets are concurrently staked, generating additional yield alongside funding rate income.
Negative Funding Rate Arbitrage	Conversely, Falcon can sell spot holdings and long futures to generate a yield with negative funding rates.
Cross-exchange Price Arbitrage	Falcons buys and sells assets across multiple markets to profit from differences in their prices.
Native Altcoin Staking	Falcon leverages native staking opportunities for supported non-stablecoin assets, allowing the protocol to earn higher on-chain yields as part of its diversified yield strategy.
Liquidity Pools	Falcon deploys a portion of assets into tier-1 on-chain liquidity pools to generate yield through on-chain dex activity and arbitrage.