Falcon USD

Falcon Finance is a collateralization protocol that lets users obtain dollar liquidity without selling the liquid assets they hold, and USDf is the system's synthetic dollar. Users can mint USDf by depositing stablecoins, large-cap cryptocurrencies such as Bitcoin and Ethereum, or certain altcoins; for collateral other than stablecoins, the value of the USDf minted is kept below the value of the deposited asset, meaning the system is overcollateralized. USDf has contracts on Ethereum, BNB Chain and XDC Network.

USDf itself does not carry yield; when staked in the protocol, it turns into sUSDf, which accrues yield. According to the project, sUSDf yield comes from diversified institutional trading strategies that go beyond basis arbitrage between futures and spot prices on large-cap cryptocurrencies; sUSDf can also be locked again for fixed terms to target additional yield. Because these strategies are run through exchanges and custodians, they also raise counterparty risk.

USDf's dollar peg is tested by sharp falls in collateral value, potential losses in the trading strategies, how quickly redemption requests are met and smart contract risks. CoinGecko also displays a warning about the proxy contract structure, which allows the contract owner to make changes to the token. The Falcon USD page on Lzzo.com presents DefiLlama's US dollar reference price and a historical chart drawn from the same source.