As of December 12, 2025, Falcon Finance ($FF) has been advancing steadily while much of the market chases short-term narratives. With Bitcoin hovering around $91,000 and many DeFi tokens trading sideways, Falcon has focused instead on expanding collateral and refining its governance framework. The token is trading near $0.45, up 4.7% on the day and 12.3% over the week, giving the protocol a market capitalization of roughly $315 million and daily trading volume close to $28 million across Binance, Gate.io, and several smaller exchanges.
Falcon’s stablecoin, USDf, recently surpassed $2 billion in circulating supply, following its December 2 integration of Mexican CETES bonds via Etherfuse’s Stablebonds. This marks another step in Falcon’s broader strategy of combining real-world assets with crypto-native collateral. Governance is also moving forward, with the protocol’s first formal proposal, FIP-1, scheduled for voting on Snapshot between December 13 and 15.
How Falcon Operates
Users mint USDf by depositing collateral such as BTC, ETH, SOL, stablecoins, or tokenized RWAs, with collateralization ratios typically maintained between 150% and 200%. USDf can then be restaked into sUSDf, currently yielding around 8.7% APY, sourced from basis trading, lending operations, and liquidity provisioning.
On December 11, Falcon introduced new vaults backed by tokenized gold (XAUt), alongside ESPORTS, VELVET, and FF pools. These vaults distribute 3–5% APR in USDf on a weekly basis while providing exposure to their underlying assets. Community members often describe them as Falcon’s “set-and-check” yields—designed for steady returns rather than constant monitoring.
Looking ahead, Falcon plans to roll out structured products that use off-exchange settlement. In this model, collateral remains in cold storage under multi-signature MPC custody while trades are executed on centralized exchanges, aiming to reduce counterparty risk without sacrificing liquidity.
Total value locked currently sits near $1.6 billion, with approximately 60% in BTC and ETH and 25% in RWAs. Liquidity integrations with Balancer have also improved swap efficiency for USDf.
Tokenomics and Governance
Falcon’s maximum supply is capped at 1 billion FF, with about 700 million tokens already in circulation. Distribution remains balanced: 40% community, 25% ecosystem and liquidity, 20% team (vesting over four years), and 15% investors, with unlocks extending through 2028.
Staking FF converts tokens into veFF (sFF), granting governance rights and boosting vault yields—up to 2× on sUSDf. Protocol fees ranging from 0.1% to 0.5% on minting and staking are used for buybacks and burns linked to TVL growth. These mechanisms are managed by the Falcon Foundation, established in September 2025, and kept separate from the core team’s treasury.
The active governance proposal, FIP-1, introduces two staking options:
sFF Prime: 180-day lock, 5.22% yield, and 10× voting power
Flexible sFF: no lock, 0.1% yield
It also removes the existing three-day unstaking delay. Early Snapshot results indicate roughly 85% support.
Growth, Risks, and Trade-Offs
Falcon raised $10 million from World Liberty Financial in July, providing capital for audits and integrations. The launch of the XAUt vault alone increased TVL by approximately 15% week-over-week. On social platforms, users have been sharing yield snapshots as part of the Falcon Miles engagement campaign.
Transparency remains a core focus, with PeckShield audits and live dashboards keeping collateral data visible. Still, risk is unavoidable. A sharp market downturn could push collateral ratios below 130%, though Falcon maintains a $50 million reserve fund for stress scenarios.
Regulation is another wildcard. Authorities in the U.S. and Asia are closely monitoring RWA tokenization, and potential KYC requirements could slow future partnerships. Competition is also intense, with MakerDAO and Ethena together controlling nearly $20 billion in TVL.
Should liquidity conditions tighten, yields could fall below 5%, and while custodial partners managing RWAs are regularly attested, they remain a structural dependency.
What’s Ahead
If FIP-1 is approved, Falcon plans to roll out institutional APIs and additional Balancer pools for USDf in Q1 2026.
Falcon isn’t racing to automate every corner of DeFi. Instead, it’s focused on making decentralized finance understandable again—yields that can be audited, governance that’s readable, and collateral that’s verifiable. “Your Asset, Your Yields” isn’t just a slogan; it reflects a protocol prioritizing clarity and trust over speed.
