A new challenge has emerged: redefining the value of synthetic stablecoins. According to a recent report by Messari Research, Falcon Finance has proposed a new evolution in stablecoin protocols, featuring a dual-token system and a sophisticated risk management framework. This project, which combines the stability of traditional finance with the flexibility of decentralized finance, aims not only to maintain the dollar peg but also encompasses revenue-generating structures, thus attracting significant attention.
Falcon Finance consists of two main tokens: USDf, an overcollateralized synthetic dollar that maintains the value of the US dollar, and sUSDf, which accumulates returns. According to Messari Research, USDf employs a dynamic overcollateralization ratio adjusted based on the volatility of the collateralized assets, aiming to maintain a value of $1 and ensuring the integrity of the peg based on Delta-neutral hedging and multi-exchange arbitrage strategies. Specifically, the stablecoin is minted at a 1:1 ratio, while non-stablecoins and RWA are subject to variable collateralization ratios based on their inherent risks.
On the other hand, sUSDf is issued based on USDf through an ERC-4626 staking vault and generates returns through advanced trading strategies. Investors can access Falcon's institutional-grade strategies through funding rate arbitrage, Altcoin staking, and options strategies, thereby obtaining higher returns relative to USDf. The yield can be further enhanced by allowing sUSDf to be re-staking after a fixed period of locking.
Falcon has constructed a multi-layered risk management system to stably control the high volatility inherent in the decentralized finance (DeFi) ecosystem. The core insurance fund, protected by a multi-signature system, compensates for lost profits during sharp market downturns and actively works to restore the USDf peg. According to Mesari Research, in emergency situations, the fund will exercise performance protection for sUSDf during that period, while simultaneously buying USDf to restore the peg. This differs from previous stablecoin projects that faltered under pressure from large-scale liquidations, giving Falcon a more robust shield and differentiating it from other cryptocurrencies.
Falcon's operational system is not only technologically advanced but also systematically designed. Collateral is managed through MPC-based custody, and all activities are transparently disclosed through dashboards and external audits. A seven-day cooling-off period is in place for asset redemptions to ensure gradual liquidation even in the event of unexpected market shocks—a key feature of the company.
In addition, Falcon operates a user engagement incentive program called "Falcon Miles," which awards miles based on activities such as minting, staking, and providing liquidity, and grants eligibility for airdrops and FF token rewards. FF is the protocol's governance token, and its utility is widely used for fee discounts, reduced OCR requirements, and priority access to new products.
As of 2025, Falcon Finance had a total circulation of 2.2 billion USDf and 142.5 million sUSDf, and had received over $45 million in investment from multiple venture capital firms, including DWF Labs, and high-net-worth individuals. Its global expansion roadmap is also ambitious, planning to integrate banking infrastructure in different regions such as the Middle East and Latin America, and upgrade its RWA-centric structure to enhance the practical usability of the digital dollar.
Following the Terra debacle, the stablecoin market has seen a growing demand for fundamental structural reforms. Falcon Finance, a protocol that balances stability, profitability, and governance, represents an attempt to address this need. Messari Research argues that the project transcends mere financial experimentation, offering a new direction for the future of digital currencies.
