You may have become accustomed to this dilemma: on one hand, there are savings in traditional banks with almost zero returns, quietly eroded by inflation; on the other hand, there are high-yield opportunities in the crypto world, accompanied by extreme volatility and uncertainty. Is there a way to balance the stability of funds with substantial returns? This is the question Falcon Finance seeks to answer.
Revisiting the 'synthetic dollar'
The core product of Falcon Finance, USDf, is essentially a 'synthetic dollar'. It is not a traditional bank deposit certificate and does not rely on the fiat currency reserves of centralized institutions, thus avoiding systemic risks similar to those of Silicon Valley Bank.
The value cornerstone of USDf is built on the universal collateral infrastructure on-chain. It is over-collateralized through a basket of high-quality assets—including BTC, ETH, and real-world assets—and employs a sophisticated Delta-neutral strategy to anchor its value. This design makes it a DeFi-native digital hard currency, possessing the purchasing power of the dollar while inheriting the censorship-resistant characteristics of crypto assets.
Breaking through traditional yield models
For investors seeking stable returns, Falcon offers a unique solution. It cleverly carves out a sustainable middle ground between the security of traditional stablecoins and the high-risk nature of liquidity mining.
Its yield does not rely on unsustainable token inflation but rather stems from real financial market activities:
Capturing the futures basis and funding rate premium brought by bullish sentiment in the crypto market
Earn real interest generated from real-world assets such as U.S. Treasury bonds and corporate bonds
This means that the USDf you hold is no longer passive 'dead money', but has transformed into an on-chain wealth management account that can automatically generate compound interest.
Dual-engine driven system stability
The key to the Falcon system's ability to continually provide high yields and maintain stability lies in its innovative dual-engine mechanism.
Diversified collateral forms the security cornerstone of the system. The protocol not only accepts mainstream cryptocurrencies as collateral but also integrates RWA assets from Centrifuge and Backed Finance. This diversified collateral structure effectively mitigates the risks posed by the volatility of a single asset.
Automated option strategies serve as the system's revenue engine. The protocol allocates most of its funds to execute professional option strategies, such as covered calls, thereby continuously capturing premium income when the market is sideways or rising. This automated mechanism ensures that the sources of revenue are both sustainable and relatively robust.
