In the cryptocurrency market, the dynamic safety valve of USDf's over-collateralization: it is not just the number 106.9%, but the refinement of risk prevention. The coefficient is often intuitively indicated by the 'over-collateralization ratio,' but Falcon Finance's USDf can maintain zero decoupling under a circulation of 2 billion. The core is not merely the collateralization ratio of 106.9%, but the refined risk control logic behind it, which includes 'graded warnings + dynamic adjustments + partial liquidations'—this logic transforms the collateralization ratio from a 'static number' into a 'dynamic safety valve.'
From the perspective of mechanism design, the over-collateralization of USDf is not a fixed value, but is adjusted in real-time according to the fluctuations of the collateral: when the price of a certain asset fluctuates by more than 5% in a single day (for example, when stock tokens trigger the threshold due to a market downturn), the system will automatically raise the collateralization ratio of that asset by 3-5 percentage points. For instance, when the price of TSLAx drops by 5%, its corresponding collateralization ratio rises from a base of 106.9% to 110%. Users must replenish collateral or reduce USDf minting within 24 hours, or a 'warning reminder' will be triggered; if the fluctuation exceeds 10%, 'partial liquidation' is initiated—only the portion of the assets exceeding the safety cushion will be liquidated, rather than a full liquidation. Compared to MakerDAO's 'one-size-fits-all' model (where collateralization ratios below 110% result in full liquidation), USDf's mechanism balances safety and user experience better: during the volatility of the US stock market in October 2025, TSLAx dropped 7.2% in a single day, and the system only triggered warnings for 5% of the excess USDf, with no full liquidations, reducing user asset loss rates to below 0.3%.
Data at a fundamental level better verifies the effectiveness of this mechanism: As of the end of November, USDf has processed a total of 350,000 minting/redemption transactions, triggering only 6 warnings (all due to short-term fluctuations in stocks or cryptocurrencies), with no liquidation defaults occurring; of the $2.15 billion collateral asset pool, 53% is in low-volatility assets such as gold and government bonds, while 47% is in medium-volatility assets like stocks and credit. This 'semi-stable and semi-increasing' structure allows the collateral ratio to remain within a safe range even in extreme market conditions — when the crypto market fell by 10% in November, the total valuation of USDf collateral only dropped by 3.2%, far lower than Dai's 7.8%.
For users, this 'dynamic safety valve' means two core values: first, assets are safer, eliminating concerns about full liquidation due to short-term fluctuations; second, usage is more flexible, with the collateral space of medium-volatility assets allowing for higher minting efficiency of USDf. For the Falcon ecosystem, this mechanism is key to attracting traditional users — feedback from small investors in Southeast Asia has indicated that it is precisely because of USDf's 'partial liquidation' design that they dare to use stock tokens as collateral to mint stablecoins, rather than fearing a total loss from a single fluctuation.
Simple sharing, does not constitute any investment advice.@Falcon Finance #FalconFinance $FF
