"Both profit and risk reduction"... Falcon Finance proposes a new strategy for the stablecoin era

The new challenges in redefining the value of synthetic stablecoins have emerged. According to a recent report released by Messari Research, Falcon Finance proposes a new evolution of stablecoin protocols with its dual-token system and sophisticated risk management framework. The project combines the stability of traditional finance with the flexibility of decentralized finance, aiming not only to maintain a dollar peg but also to include revenue-generating structures, thus attracting significant attention.

Falcon Finance consists of two main tokens: USDf, a synthetic dollar maintained through over-collateralization to preserve its dollar value, and sUSDf, which accumulates yield. According to Messari Research, USDf employs a dynamic over-collateralization rate adjusted based on collateral asset volatility, aiming to maintain a 1 USD value, and ensures peg stability through delta-neutral hedging and multi-exchange arbitrage strategies. Notably, stablecoins are minted on a 1:1 basis, while non-stablecoin assets and RWAs are subject to variable collateralization rates based on their inherent risks.

On the other hand, sUSDf is issued via an ERC-4626 staking vault based on USDf and generates yield through advanced trading strategies. Investors can access Falcon’s institutional-grade strategies through funding rate arbitrage, altcoin staking, options strategies, and more, to earn higher returns relative to USDf. Additionally, the re-staking feature that locks sUSDf for a fixed period can further enhance yields.

Falcon has built a multi-layer risk response system to stably manage the high volatility characteristic of the decentralized finance ecosystem. The protocol’s core insurance fund is protected by a multi-signature system, compensating for losses during sharp market downturns and actively working to restore the USDf peg. According to Messari Research, this fund executes performance protection for sUSDf during emergencies and buys USDf to restore the peg. Unlike previous stablecoin projects that faltered under large-scale liquidation pressures, Falcon possesses a more robust shield, creating a clear differentiation.

Falcon’s system is not only technologically sophisticated but also systematically designed. Collateral assets are managed via MPC-based custody, with all activities transparently displayed on dashboards and subject to external audits. Asset redemptions include a 7-day cooling-off period to ensure gradual liquidation even during unexpected market shocks, which is a distinctive feature.

Additionally, Falcon operates a user engagement incentive program called “Falcon Miles,” which awards mileage points based on activities such as minting, staking, and providing liquidity. These points can be used to qualify for airdrops and FF token rewards. FF is the protocol’s governance token, widely used for fee discounts, reducing OCR requirements, and gaining priority access to new products.

As of 2025, Falcon Finance has a circulation of 2.2 billion USDf and 142.5 million sUSDf, with over $45 million in total investments from multiple venture capital firms including DWF Labs and high-net-worth individuals. Its global expansion roadmap is ambitious, planning to integrate banking infrastructure across regions such as the Middle East and Latin America, and upgrade to a RWA-centric structure to enhance the practical usability of digital dollars.

The stablecoin market has seen increasing demand for fundamental structural reforms following the Terra incident. Falcon Finance, as a protocol that balances stability, yield, and governance, is a response to this need. Messari Research’s analysis suggests that the project goes beyond mere financial experimentation, offering a new direction for the future of digital currencies.