Falcon Finance, the synthetic dollar protocol whose TVL has been climbing all year, has unveiled a new transparency and security framework for USDf. The all-new standard being rolled out by Falcon is a reflection of both demand from its users and the level it aspires to reach now that the supply of its yield-bearing stablecoin has surpassed $2B. No longer the plucky contender, USDf has evolved into a major player and serious rival to USDe.
Falcon’s stablecoin protocol enables users to lock crypto assets as collateral – including plain stablecoins such as USDT and USDC – and to mint USDf. After minting the synthetic stablecoin, they can then earn yield on it through staking it in the Falcon Finance dashboard – and additionally utilize the liquid token they receive in return to explore further earning opportunities across the DeFi ecosystem. The launch of a new transparency framework attests to the progress USDf has made this year – and indicates where Falcon’s DeFi protocol is headed next.
Transparency as a Service
While USDf has had a very good year, the broader yield-bearing stablecoin sector has encountered the occasional speed-bump, the latest being the depeg of Stream’s xUSD, whose yield strategies were found to be deviating from delta-neutral sources – despite what its founders had claimed to the contrary. While not a USDf problem, it’s understandable that Falcon Finance should have used the opportunity to reassure users that USDf is fully backed – and that its yield is fully sustainable.
Unveiling its new risk management framework, Falcon’s Andrei Garchev said: “Users should never have to guess what is backing their assets or how risk is being managed. If USDf is to serve as collateral and a yield instrument for serious builders and institutions, its reserves, custody, and controls must be transparent by default and validated by independent experts.”
Putting It All on the Table
Falcon Finance had already released a transparency dashboard that reveals key metrics concerning the backing for its native stablecoin, full breakdown of reserves, and yield strategy allocation. This framework has since been further enhanced by the addition of new metrics that provide an unprecedented insight into the security and risk-management parameters built into USDf. After staking USDf to create sUSDf, Falcon users can tap into a yield-bearing token that leverages diversified, institutional-grade trading strategies.
Not only does Falcon enable users to view near real-time data points concerning USDf’s backing and supply, but it enlists independent auditors to provide attestation. Coupled with third-party smart contract audits, these measures have bolstered confidence in USDf, contributing to its growing adoption by retail DeFi users and institutions too.
Falcon Finance believes that it can attract clients, including Web3 projects overseeing Digital Asset Treasuries (DATs), seeking yield that beats the returns available from ETH staking. With yield for staked USDf currently standing at over 9%, it’s currently delivering around 2x that benchmark. Falcon’s decision to provide full transparency into its operations should help to further grow TVL while driving greater institutional adoption of yield-bearing stablecoins, now a $15B sector.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.