I have been borrowing USDf for months now, mostly against a mix of BTC and tokenized treasuries, and the thing that keeps surprising me is how steady the borrowing costs stay even when the market gets weird. In other places I have used, fees either sit frozen forever until the peg breaks, or they swing violently after some slow governance vote that scares everyone off.
Falcon handles it differently with fees that move on their own based on how the peg is trading. If USDf slips a bit below a dollar, the borrow rate drops automatically to pull in more minters. More supply comes online, arbitrage kicks in, and the peg tightens back up without anyone panicking. When it trades above, fees rise gently to slow down new issuance and keep things from overheating.
A while back we had one of those quick dips where sentiment turned sour overnight. USDf traded a fraction under for a few hours. The fee adjusted down just enough, I saw new mints pick up on-chain, and by morning everything was back to normal. No drama, no proposals, no peg hanging out at 0.99 for days like I’ve seen elsewhere.
The changes are gradual and capped, so you’re never blindsided. My current borrow rate has stayed in a predictable band through all the recent chop. I can actually plan around it instead of constantly checking for surprise hikes that force me to add collateral or close positions.
It also weeds out the wrong kind of borrowers. When fees rise during hot periods, the pure leverage gamblers back off, leaving more room for people who actually want stable liquidity for yields or hedging. The collateral pool ends up with better ratios and less risk of mass liquidations.
Everything behind the adjustment is public too,the TWAP data from the oracle, the exact fee curve, the mint/redemption flows. You can verify why a change happened and see it wasn’t some arbitrary decision.
For me, this is what makes USDf feel like a real workhorse synthetic instead of a speculative one. The peg doesn’t just hold because people hope,it holds because the economics nudge behavior in the right direction before small issues become big ones. Borrowing stays usable and predictable, which is exactly what you want when you’re trying to manage real positions instead of gambling on short term spreads.
If you have used other synthetics and gotten burned by frozen parameters or erratic fee swings, this dynamic approach is a breath of fresh air. It’s not the flashiest feature, but it’s the one that keeps the whole system reliable day after day. Solid engineering that just works.
