How token burn or mint mechanics affect Falcon Finance supply dynamics
Falcon Finance (FF) employs token burn mechanisms tied to protocol revenue from staking and yield generation, systematically reducing circulating supply to foster scarcity and support price stability during market downturns.
Minting primarily occurs through its synthetic dollar protocol (USDf), where users deposit collateral like stablecoins or altcoins to mint USDf at 1:1 or overcollateralized ratios, indirectly influencing FF dynamics via boosted yields for stakers without directly inflating FF supply.
## Supply Impact
*Burns create deflation*: Revenue-funded burns retire FF tokens, countering inflation and aligning long-term holder incentives, with a 10B total supply where 35% funds ecosystem growth.
*Minting equilibrium*: Collateral-based USDf minting maintains protocol reserves exceeding supply, enhancing security but not minting new FF; redemptions burn USDf proportionally.
*Net effect*: These mechanics promote bear market resilience by balancing liquidity (32.2% allocated) with scarcity, potentially driving value if demand grows.
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