Collateral sounds simple until you try to generalize it.
In most DeFi systems, collateral is narrow by design. One asset, one risk model, one liquidation path. That works — until liquidity fragments and capital efficiency collapses.
Falcon Finance is aiming at a harder problem: universal collateralization.
That phrase gets thrown around, but the implication is heavy. If different assets can be used flexibly across yield and liquidity strategies, then the system has to normalize risk, pricing, and utilization without assuming everything behaves the same under stress.
That’s not a UI problem.
That’s a balance-sheet problem.
What stands out in Falcon’s approach is the focus on infrastructure before incentives. Instead of optimizing for short-term APY optics, the design emphasizes how collateral can move, stack, and remain productive without breaking liquidation logic.
In other words, it’s trying to make collateral composable, not just accepted.
This matters because the next phase of DeFi growth won’t come from more tokens — it will come from better reuse of existing capital. Systems that can safely unlock idle liquidity will outlast those that rely on emissions.
Universal collateral isn’t about letting everything in.
It’s about knowing how each thing behaves when conditions change.
That’s the hard part. And it’s the part Falcon Finance is clearly thinking about.
