Falcon Finance, an innovative protocol that transforms any liquid asset into productive collateral, announced today the launch of a new offchain vault dedicated to bitcoin.
This solution is aimed at those who hold bitcoin and wish to generate a steady income without having to give up their long-term exposure to the asset. The new product offers an estimated yield between 3% and 5% APR, paid in USDf, Falcon’s dollar-pegged settlement asset.
Bitcoin: The Heart of Falcon’s Reserves
According to Falcon’s transparency dashboard, bitcoin accounts for over 80% of the protocol’s reserves. This figure highlights the strategic importance of bitcoin within the Falcon ecosystem and the need for solutions that allow BTC holders to earn predictable income, denominated in dollars, without selling or “wrapping” their bitcoin.
A New Paradigm for Bitcoin Productivity
Artem Tolkachev, Chief RWA Officer at Falcon Finance, stated:
“Our thesis has always been that any liquid asset should be able to generate liquidity and yield onchain.
Bitcoin is the largest and most liquid asset in the crypto world — and it is already the main component of Falcon’s reserves — but until now it has been the most challenging to make productive without compromises. This vault is a game changer. BTC can now generate onchain liquidity without being wrapped or bridged.”
How Falcon’s Offchain Vault Works
Traditionally, those holding bitcoin and seeking yield face a dilemma: keep BTC without any yield, or sell it, wrap the asset, or use it as collateral to obtain loans. With over 120 billion dollars now held in spot bitcoin ETFs, the demand for tools that make bitcoin productive without altering exposure has become a strategic priority.
Income in USDf, Unchanged Exposure to Bitcoin
Falcon’s new offchain vault allows holders to continue owning bitcoin while simultaneously earning a stable income denominated in dollars. The bitcoins deposited in the vault are not sold, converted into synthetic assets, or wrapped into onchain equivalents. Users maintain full exposure to BTC, while receiving returns in USDf, which can be withdrawn onchain or used within Falcon’s DeFi integrations.
Traditional Risks and Advantages of the Falcon Model
Traditional yield products for bitcoin — such as lending platforms, covered-call strategies, and wrapped asset protocols — generally offer between 2% and 6% APY. However, recent failures in the sector have highlighted custody risks, while solutions based on wrapped BTC introduce bridge risks and smart contract dependencies that may deter security-conscious investors.
No Wrapping, No Bridge: Security and Simplicity
Since the base layer of Bitcoin does not support smart contracts, there is no native way to stake directly on the Bitcoin blockchain. Most yield products circumvent this limitation by wrapping BTC into equivalent tokens and using them on DeFi protocols of other chains, thereby introducing additional risks related to custody, bridges, and smart contracts.
Falcon adopts a different approach: users complete the KYC procedure, deposit bitcoin into their Falcon account, and participate in the vault. The bitcoin remains within Falcon’s custody infrastructure, without being wrapped or bridged onchain. The yield is generated through offchain execution, with returns paid in USDf and credited directly to the user’s account.
Yield Distribution Methods
The yield is distributed as a simple APR, with profits automatically credited to the user’s Falcon account. Earnings in USDf can be withdrawn onchain, while the initial capital in bitcoin can be unlocked and returned at the end of the period.
Falcon Finance: Growth and Prospects
Falcon Finance has reached a supply exceeding $2.1 billion in USDf, backed by over $2.3 billion in reserves that include crypto blue chips, tokenized Treasuries, sovereign bonds, equities, and gold. Bitcoin is the most significant component of these reserves. The protocol’s yield token, sUSDf, has distributed over $19 million in cumulative yield since launch.
Expansion and Future of Offchain Yield Products
The offchain vault for bitcoin is available starting today, but Falcon already plans to extend similar account-based products to other assets that require offchain execution due to technical limitations, regulatory constraints, or institutional custody needs.
Falcon Finance: A Bridge between Onchain and Offchain Finance
Falcon Finance positions itself as a universal collateralization infrastructure, transforming any liquid asset — including digital assets, currency-pegged tokens, and tokenized real assets — into onchain liquidity pegged to the dollar. By bridging onchain and offchain financial systems, Falcon enables institutions, protocols, and capital allocators to unlock stable, yield-generating liquidity from assets already in their portfolios.