> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/resources/business-model.md).

# How Farlight earns

The fee lines that fund Farlight, the token that sits beside them, and what the protocol deliberately leaves uncharged.

Farlight's income comes from a handful of small, visible fees, each placed at a moment where the protocol has done something useful: when a loan originates, when interest is paid, when collateral is liquidated and when a loan is refinanced. A protocol token exists, $FARLIGHT on Robinhood Chain, but the business does not depend on it. No emissions are paid out, and no spread hides inside the rate.

## The fee lines

| Fee                              | Initial rate              | Who pays                                                     |
| -------------------------------- | ------------------------- | ------------------------------------------------------------ |
| Origination                      | 0.25% of principal        | Borrower                                                     |
| Share of interest                | 10% of interest paid      | Lender, netted from the payout                               |
| Share of liquidation penalty     | 2 of the 3 penalty points | Protocol and lenders; the remaining point goes to the keeper |
| Refinance                        | 0.10% of principal        | Borrower                                                     |
| Idle vault yield share (roadmap) | 5% of yield               | Lender                                                       |

The full schedule is on the [Fees](/protocol/fees.md) page.

## The token

$FARLIGHT lives at `0xe33ab021662e23f745be8e5b237babe8c7ad626c` on Robinhood Chain, with a fixed supply of 1 billion and no mint function. It sits beside the fee model rather than replacing it. The lines in the table above are what the protocol earns, and none of them is paid in token emissions or subsidised by them.

## Revenue at scale

Take an average of 50M USDG outstanding, an average term of 30 days and an average APR of 8%:

| Line                              | Working                | Per year (USDG) |
| --------------------------------- | ---------------------- | --------------- |
| Origination                       | 50M × 12 turns × 0.25% | \~1.5M          |
| Share of interest                 | 50M × 8% × 10%         | \~0.4M          |
| **Total, excluding liquidations** |                        | **\~1.9M**      |

Operations, audits and the bug bounty are covered once outstanding loans sit somewhere between 30M and 40M USDG.

## Why each fee lands where it does

* **Origination** is charged to the borrower, who opens the loan and takes the liquidity.
* The **interest share** is charged to the lender. It scales with the return the protocol made possible, and it is collected only when the lender is actually paid.
* **Refinance** is charged to the borrower, because refinancing serves the borrower by removing the maturity cliff.
* The **liquidation** penalty is charged to the borrower who defaulted, and it is split so that keepers are paid for acting and lenders are compensated for the disruption.

## What is not charged

* A spread between lending and borrowing rates. A peer-to-peer market has no such spread to collect.
* Order flow. The book is public and anyone may export it.
* Data. The indexer and the Observatory, the public loan explorer, are free and open source.

## Where fee income goes

Fees pay for audits, the bug bounty and daily operations. When the governance module takes over parameter control, allocation becomes its decision. See [Corporate structure](/compliance/corporate-structure.md).


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.usefarlight.com/resources/business-model.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.