What Falcon Finance is creating does not feel like other things we normally see in the crypto world. The majority of protocols discuss yield or leverage or how to pump numbers in the short-run. Falcon on the other one dwells upon a simple financial fact that individuals tend to forget. All people own assets yet not all people can access them when required. It is this disconnecting what people have and what they can do that creates stress bad timing and long run damaging decisions. Falcon ventures into this space with an uncomplicated concept. Transformation of dormant assets into active liquidity without compelling people to sell what they do not wish to do. This philosophy is small but it has colossal influences on how consumers deal with their personal wealth.
The fact that Falcon uses the assets that sit idle and allows people to utilize them in the form of USDf is one of the strongest aspects of the concept. Most of them hold the tokens long term and they are not interested in selling even when they require money to purchase something. Falcon provides them with the ability to mint USDf based on their assets implying that they will receive liquidity without being exposed to the market. Such a transformation of passive value into active one is not meaningless, as people will be free to act and not lose their positions. It is some kind of breathing space in terms of finances that does not punish any long term conviction. Personally, I believe this is the most liberating feature of each user since it transforms the assets that one has into something that can be useful nowadays without the need to sell them.
One of the most terrible crypto-patterns is forced selling. It is common that people sell at the bottom just because life is a liquid. Unexpected costs and bills emergencies do not give a green market a chance. Falcon stops this cycle by allowing users to mint USDf rather than selling their assets. This keeps them in line with their long term vision and safeguard their portfolio against impulsive and emotive action. The users are not pushed to panic selling and remain calmer and make decisions that work in their favor rather than harm them. To me this is one of the least appreciated advantages as emotional stability in investing is as significant as any technical instrument.
USDf itself operates as a way of a protective layer particularly in volatile markets. When the whole thing is going scot free and the people are scrambling USDf will remain constant as it is supported by overcollateralized positions. In times of uncertainty, one will find it like untying a lifeline to have something constant. USDf does just that and provides users with a stable currency that does not lose its worth in times when the market is unpredictable. This stability is hard to find in the crypto world and it causes USDf to feel more of a safety net than a stable asset. Such stability helps the users to have confidence and room to think instead of having to react.
Most systems are seen to be restrictive and heavy in collateralization. It imprisons users and makes them feel restricted. Falcon inverts this concept as collateral is presented as empowering. The system receives a wide variety of assets such as digital tokens and tokenized real world assets. This provides freedom of selection of collateral of personal risk comfort and financial plans. Falcon does not restrict but offers alternatives to people and creates the impression of flexibility. I believe that this design is among the strengths of Falcon as the real finance is most effective when more individuals and asset categories become a part of it.
Development of trust is done differently within Falcon. Rather than relying on promises or algorithmic magic Falcon relies upon overcollateralization. Each USDf is supported by an amount of more value compared to the issued amount. This model is straightforward transparent and powerful even in case the market is pressurized. Users need not fear covert machinations as all of it is supported by demonstrable value. This makes Falcon have a more solid and realistic base and I find that very reassuring myself especially in an industry where stability is sometimes a very elusive notion.
Long term holders always have an issue with liquidity. They desire to retain their assets but they require life funds as well. Falcon manages to resolve this tension through predictable liquidity. Users are not constrained to mint USDf only when they want to through the long term strategy. This simplifies and puts financial planning under control. Individuals understand that they can obtain worth without losing the resources that they hold dear to them. Such predictability is beneficial to users who view markets with long-term focus rather than doing short-term trades.
The logicality used by institutions also makes Falcon coincide with the introduction of tokenized real world assets. These resources act according to the knowledge and belief of traditional investors. Falcon would be attractive to both parties by combining the real world assets with the speed and transparency of blockchain technology. It is a tie between crypto and traditional finance that the market has been gradually transitioning to. This is a hybrid strategy demonstrating that Falcon is not only considering crypto natives but also the future audience that will take the space using more familiar asset classes.
Falcon also builds a circular ecosystem in which the liquidity is not stolen and ignored but flows in a smooth manner. Users can use USDf to make funds when paying yield strategies or investing new money. They pump money back when they open new collateral positions and this makes the ecosystem stronger and more active. The circular flow is a reflection of real economies in which money circulates and generates value instead of being locked up. I interpret this design as an indicator of maturity since healthy systems require active movement constantly.
Falcon is one of the silent powers that leave people calm. Users behave rationally when they do not have pressure to sell or hurry in decisions that they make. Their association with their assets improves. The indirect benefit of emotional stability with Falcon is the structure that provides people with control and choices. This may seem minor but in markets such as crypto where feelings are high it is a difference in the behavior of people and the end result.
The larger context is that Falcon is influencing the development of on chain liquidity. It renders the access to liquidity secure and really useful. Most of the protocols are concerned with quick profits when Falcon is concerned with actual financial demands such as stability ownership and accessibility. In this way, Falcon has been designed as a protocol that will not go out of fashion at the end of the hype cycles since they are the problems that are independent of the market conditions.
Falcon considers liquidity as a human need, not only the tool of trade. It is only at some point that everyone requires that money without the desire to lose what he has invested. This reality is not usually taken into account by traditional finance. Falcon honours it and presents the users with means to resolve short term necessities without ruining long term plans. That strategy is more human centered and closer to the way people think about their own money.
It is also different in Falcon in terms of collateral. Rather than a restrictive lock it is a long term companion that comes to the rescue of the user. People have greater control and comfort with the opportunity to select among numerous types of assets. This design makes the users feel in control rather than feel locked down by the protocol.
USDf is a daily activity layer that can be used. It is designed to be practical and durable to perform the daily on chain activities. Whatever a person may desire to pay or maintain some liquidity to seize opportunities USDf favors such undertakings at all times. This practical utility renders it useful as compared to synthetic assets, which can be utilized only in specific situations.
Falcon also enhances its ecosystem through promoting diversity of assets. Diversity is a risk distributor which makes the system more stable. It welcomes users with varying backgrounds including crypto natives to traditional finance players. This extensive accessibility contributes to the ecosystem to develop in a healthier manner.
The Falcon is also easier to maintain a long term vision as the users are not enticed into short term decisions. Markets that are hard create breathing space that Falcon provides people to remain focused on their goals. This human aspect of the protocol provides emotional assistance to people and makes them think in the volatility.
Yield within Falcon is also more sustainable. Rather than money inflating the rewards Falcon develops through a healthy liquidity movement. This causes returns to be real and minimizes the weaknesses of much DeFi yield models. This will give users the confidence to plan long term strategies since they are not going to have their yield based on volatile incentives.
There still is not enough to knock Falcon off track even in rough markets since the company has an overcollateralized model and asset diversification. USDf remains usable and stable that generates trust. And trust is among the most relevant components required to have crypto mature.
Falcon brings the ancient finance principles to the blockchain speed/openness. Such a combination of the old and the new makes Falcon stand out. Conventional financial provides sanity and discipline. Blockchain provides access and transparency. Falcon combines all this in a manner, which seems contemporary and functional.
One may consider Falcon in a broader perspective and it seems to be one step to universal on chain liquidity access. A global place where everyone everywhere can make value without selling her assets. Millions of people can benefit due to this vision since liquidity issues are all around.
Falcon is not creating infrastructure that is hype-based. It is constructed on actual needs and long term utility. That is the reason why I think Falcon Finance will survive the market cycles and be a significant element of on chain finance in many years.
