What is Falcon USD (USDf)?

Deep Dive

1. Core Design & Collateral

USDf is minted by depositing assets into Falcon’s protocol, which maintains a minimum 116% overcollateralization ratio (Falcon Finance Docs). Collateral types include:
- Stablecoins: USDT/USDC (1:1 ratio)
- Volatile assets: BTC/ETH/SOL (overcollateralized based on volatility)
- Tokenized RWAs: U.S. Treasuries and corporate debt (since July 2025)

This diversified approach aims to balance stability with capital efficiency.

2. Yield Ecosystem

USDf transforms into sUSDf when staked – a yield-bearing token accruing value through:
1. Funding rate arbitrage (44% of yield)
2. Cross-exchange spreads (34%)
3. Staking rewards (22%) (CryptoBriefing)
Users amplify returns via liquidity provisioning (up to 60x Miles rewards) and integrations with protocols like Pendle and Morpho.

3. Risk Management

• Transparency dashboard: Real-time reserve tracking (BTC 52%, stablecoins 28%, altcoins 20% as of Nov 2025)
• Insurance fund: Protocol profits allocated to stabilize USDf during market stress
• ISAE 3000 audits: Quarterly reserve attestations by Harris & Trotter LLP

Conclusion

Falcon USD combines multi-chain liquidity access with institutional-grade yield strategies, positioning itself as infrastructure for both crypto-native and real-world assets. While its collateral diversity enables novel use cases, how will evolving regulations impact its RWA integrations?