> For the complete documentation index, see [llms.txt](https://crocodile-finance.gitbook.io/crocodile-finance-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://crocodile-finance.gitbook.io/crocodile-finance-docs/introduction-and-faqs/welcome/general-faqs.md).

# General FAQs

## **1. What does dynamic Nest Expansion (DNE) mean?**

We function on a dynamic system in which the expansion depends on several factors such as the TWAP of $CROC, revenue generated by Crocodile Finance, price of $gCROC, amount of $gCROC staked in the boardroom & more. 

During an expansionary epoch, **staked $gCROC tokens mint new $CROC**, increasing its circulating supply. If the price of **$CROC** is above its target peg - 1.01 AVAX -, the algorithm expands supply to bring it back to equilibrium.

## **2.** Understanding Crocodile Finance's Peg Stability Module (PSM)?

1. What is PSM? Peg Stability Module (PSM) is a fee mechanism that strengthens $CROC's peg to $AVAX by creating a direct link between $gCROC rewards and stable asset backing.
2. How it Works (Simple Example):

* User wants to claim 1 $gCROC (worth 1000 $AVAX)
* PSM requires a fee payment of 350 $AVAX ( 35% of it's worth )

Process:

* User pays 350 $AVAX
* Treasury receives and holds the $AVAX
* User receives their 1 $gCROC, worth 1000 $AVAX

1. Why it Matters: \
   • Creates real backing for $CROC using $AVAX \
   • Builds treasury reserves organically \
   • Strengthens the peg through actual asset backing \
   • Reduces reliance on emissions alone
2. Key Difference from Traditional Models: 

Traditional: Rely solely on market forces 

Crocodile's PSM: Active fee capture → Real stable backing → Stronger peg

## **3.** Are the Nest rewards pro-rated by time?

No. Nest rewards depend solely on the **amount of staked $gCROC tokens** and not when they were staked during the epoch. Whether staked 3 hours or 30 seconds before epoch emissions, the reward remains the same.

## **4.** What happens If $CROC continues climbing above the price of the peg ?

If the price of **$CROC** remains high, the Nest has a dynamic expansion rate in which the higher the peg, the larger the expansion rate, the lower the peg, the lower the expansion rate.

## **5. Why can't I claim on The Nest?**

Depositing $gCROC or claiming $CROC rewards onto the Nest triggers lock resets:

* gCROC withdraw locked for 4 epochs
* CROC harvest locked for 2 epochs
* Rewards Burn after 8 epochs of no interactions with The Nest

## **6. Why do my rewards burn in the Nest?**

Crocodile Finance prioritizes **long-term stability** over short-term high yields. By being able to **adjust expansion rates based on revenue**, we encourage users to **provide liquidity** rather than just rely on single-token staking, which strengthens the protocol's sustainability. 

We've also added a new mechanism in which rewards not claimed after 8 epochs are burned to increase engagement and attachment with the protocol.

## **7. What will happen when shares circulating supply = Total supply? Will emissions stop?**

Yes. Once the maximum supply of $gCROC is reached, emissions stop. However, Crocodile Finance's vision is to become a platform that boosts rewards for users on Pharaoh Exchange &/or Blackhole, in turn, users who deposit to earn $gCROC will have the underlying LP deposited into the gauge for Pharaoh generating revenue for the treasury via Pharaoh or Blackhole rewards.

Nest rewards will continue as long as $CROC remains above the peg.

## **8. What is an epoch?**

An epoch in the **Crocodile Finance** ecosystem is a **6-hour period** in which the total supply of **$CROC** is adjusted. The token price is monitored to determine if a **supply expansion or contraction** is needed.