Imagine you are piloting a precision hypersonic passenger aircraft, the Falcon. The yield curve on the dashboard looks flawless, but if you mix highly volatile and unstable low-quality fuel into the tank to reduce weight, the engines will instantly shut down due to power imbalance once the aircraft enters the thin atmosphere at ten thousand meters. In 2025, in this highly fragmented liquidity deep water zone of DeFi, the Falcon protocol is like this high-precision engine, and your deposited collateral is the fuel.
Many people suffer from a type of 'asset obesity,' believing that as long as they show valuable and liquid assets in their wallet, they should be able to stuff them into the Falcon to exchange for liquidity or leverage. This cognitive bias is the root cause of most people being liquidated during severe market fluctuations. The paradox is that in a protocol like Falcon, which pursues efficient capital utilization, the 'book value' of assets is far less important than their 'risk resistance genes.'
Entering December 2025, with the full explosion of modular public chains and the re-staking track, the hierarchy of assets has become unprecedentedly complex. To protect your position, you must exclude the following three types of collateral from Falcon's collateral list, even if their annualized returns seem enticing.
Category 1: Shadow assets with 'exit latency'.
This is most common in the ongoing wave of re-staking. You might hold a liquidity re-staking token of some ETH, which, although quoted in the secondary market, may have an underlying unstaking period of up to 14 or even 21 days. Putting this kind of asset into Falcon is like building a house on an earthquake fault without a foundation. Once extreme market conditions arise and oracle prices fluctuate significantly, Falcon's liquidation mechanism will be triggered instantly. However, due to the severe discount (De-peg) that these types of assets experience when liquidity dries up, liquidators cannot complete asset liquidation without incurring huge slippage. The ultimate result is: your position is forcibly liquidated, and the protocol incurs bad debt. On-chain data from the third quarter of 2025 shows that over 65% of the protocol's bad debts come from these 'seemingly liquid, but actually dead' shadow assets.
Category 2: Highly correlated 'inner loop' fiat currency (Circular Correlation Tokens).
If you are collateralizing a governance token of a certain ecosystem in Falcon, but borrowing stablecoins or related assets of that ecosystem, you are essentially engaging in a self-destructive gamble. The danger of this 'inner loop' collateral lies in its high positive correlation to volatility. When the market declines, the falling price of the governance token leads to a decrease in collateralization ratio; to make up for the collateral, users have to sell related assets, which further depresses prices, creating a death spiral. Such assets are profit boosters in calm waters but become credit shredders when storms arise. An excellent Falcon strategy should seek negatively correlated or weakly correlated asset combinations, rather than stacking logically identical chips in the same basket.
Category 3: Long-tail blue chips lacking 'multi-source pricing feeds' (Single-Source Oracle Assets).
The hacking attacks of 2025 have evolved from protocol vulnerabilities to oracle manipulation attacks. Some assets have entered the top 100 by market capitalization, but their depth is mainly concentrated in a few decentralized exchange (DEX) pools. If Falcon's pricing of these assets overly relies on a single on-chain oracle, it leaves a backdoor for attackers. Once a massive trade instantaneously drives down prices in the DEX, Falcon's smart contract may mistakenly think your collateral's value has dropped to zero, triggering a misfire liquidation.
From a technical architecture perspective, Falcon's advantage lies in its efficient liquidation engine and cross-chain fund allocation capabilities, but this system has extremely high requirements for the 'physique' of collateral. According to the latest market indicators in December 2025, the 2% deep volatility of mainstream assets like BNB and ETH has dropped to historical lows, and they remain Falcon's most solid ballast.
For operational advice, I have distilled it into a simple 'three checks' rule: first, check whether the 24-hour depth of the secondary market exceeds 10 times the collateral size; second, check whether the asset has a forced lock-up period of more than 7 days for unstaking; third, check whether the oracle has more than three independent data sources.
In the jungle of Web3, greed is the driving force for survival, but restraint is the capital for staying alive. Falcon is a powerful leverage tool, but the safety of the tool depends on the materials you put into it. Don't let those fancy shadow assets become the deadliest loophole on your wealth vessel.
Which asset currently occupies the highest proportion of your position in Falcon? Have you checked its slippage performance under extreme market conditions? Feel free to share your risk assessment report in the comments, and let's review together.
This article is an independent analysis and does not constitute investment advice.
