A Comprehensive Understanding of Falcon Finance (FF): Can the Universal Collateral Protocol Reshape the Stablecoin Landscape?

The crypto assets market is once again welcoming an important moment. On September 29, 2025, Falcon Finance (FF) officially logs in to mainstream CEX platforms, initiating trading and airdrop activities. This project, created by a team with a background from the renowned market maker DWF Labs, has accumulated nearly $190 million in total lock-up position (TVL) during its testing phase, thanks to its unique positioning as a "universal collateral infrastructure."

01 Project Origin: Stablecoin Protocol with Market Maker Background

Falcon Finance was established in early 2025 by Andrei Grachev, co-founder of DWF Labs. This background has made it a focal point of market attention since its inception.

DWF Labs is a seasoned market maker and investment institution in the crypto assets industry, achieving remarkable results during this cycle. The market maker personally stepped in to create a stable protocol, which is a first in the industry.

On July 30, 2025, Falcon Finance announced that it has received a $10 million investment from World Liberty Financial (WLFI). This is WLFI's first investment in the stablecoin sector, and WLFI itself also holds a stablecoin USD1, backed by U.S. Treasury bonds and cash.

Both parties plan to promote the interoperability technology integration between USDf and USD1, forming a complementary pattern.

02 Core Mechanism: Dual Token System and Diverse Revenue Strategies

The core of Falcon Finance is a universal collateral protocol that allows users to use various assets as collateral to mint a synthetic stablecoin pegged to the dollar, USDf.

The protocol adopts a dual-token system design:

• USDf: A synthetic stablecoin pegged to the US dollar.
• sUSDf: The interest-bearing version of USDf, holders can automatically receive the earnings generated by the protocol.

In terms of the collateral mechanism, Falcon Finance supports a wide range of asset types:

• Stablecoins (USDT, USDC, etc.) can be minted at a 1:1 ratio for USDf.
• Mainstream crypto assets (BTC, ETH, SOL, etc.) require over-collateralization
• In the future, tokenized real-world assets (RWA) will also be integrated.

Unlike many DeFi protocols that rely on a single revenue strategy, Falcon Finance has diversified its sources of income.

Including funding rate arbitrage, cross-exchange price differential arbitrage and other strategies that market makers excel at, this diversified income base allows it to potentially maintain stable returns under different market conditions.

03 Market Performance: TVL exceeds 190 million USD, yield reaches 9.24%

As of September 29, 2025, Falcon Finance has delivered an impressive market performance.

Data shows that the circulating supply of USDf has reached approximately $1.89 billion, supported by about $1.96 billion in collateral, with a collateralization ratio of approximately 103.7%.

The scale of sUSDf is approximately $508 million, providing holders with an annualized yield of about 9.24%. This yield has a competitive advantage in the stablecoin protocol.

The total Lock-up Position (TVL) of the protocol is nearing $190 million, demonstrating the market's initial recognition of its model.

In terms of token distribution, Falcon Finance has also announced some plans. According to the information released by Gate Square, 0.3% of the total supply of FF tokens will be allocated to specific platforms, distributed in a 50/50 ratio between the top 200 players on the leaderboard and platform stakers.

04 Regulatory Challenges: Different Responses Globally

Like most crypto projects, Falcon Finance faces a complex regulatory environment.

Analysis shows that FalconStable (FF) poses a fundamental challenge to traditional financial regulatory frameworks due to the introduction of a dual-token stablecoin protocol that requires no intermediaries.

The global regulatory landscape shows characteristics of fragmentation:

• United States: Multiple agencies may have jurisdiction over FF, and the SEC may view tokens with governance functions as investment contracts.
• European Union: The MiCA framework provides a unified set of rules for crypto assets, and FF may be classified as a utility token.
• Asia: Attitudes vary, Singapore has launched a "regulatory sandbox" to attract innovative projects.

Classification Dilemma is the core regulatory issue faced by FF – in different jurisdictions, it may be defined as currency, commodity, security, or an entirely new asset class, each classification corresponding to different regulatory requirements.

05 Competitive Advantage: Market Maker Gene and Diversified Strategy

Falcon Finance has several differentiated advantages in the highly competitive stablecoin market.

The trading capacity brought by its market maker background is one of its core advantages.

As the researchers pointed out, "The identity of market makers gives them a natural advantage in executing trading and profit strategies." This makes Falcon Finance more professional in executing complex strategies such as funding rate arbitrage and cross-exchange arbitrage.

Diverse collateral types are another major competitive advantage.

Unlike traditional stablecoins that are usually backed by fiat currency or a single cryptocurrency, Falcon Finance allows users to deposit multiple assets to mint USDf, including stablecoins, mainstream crypto assets, and future tokenized RWAs.

The transparent risk control and compliance foundation of Falcon Finance also makes it more attractive to institutional users.

The protocol adopts third-party audit verification, publicly displaying over 110% reserve backing for USDf, and plans to regularly release detailed reserve proofs and audit reports.

06 Future Outlook: From Stablecoins to Universal Collateral Infrastructure

The vision of Falcon Finance goes far beyond issuing another stablecoin.

DWF co-founder Andrei Grachev stated: "A protocol that allows entry with any asset, yields returns, and exits with any asset to any place is Falcon Finance." This vision depicts a universal collateral platform that connects traditional finance with the DeFi world.

According to the official roadmap, Falcon Finance plans to focus on expanding the "fiat channel" for USD liquidity and achieve multi-chain deployment by the end of 2025.

Plans to open regulated fiat deposit channels in major markets such as Latin America, Turkey, and the Eurozone, and to promote USDf towards Layer 1/Layer 2 including Ethereum L2 and other public chains.

By 2026, Falcon plans to build a "Real Asset Engine" to support the tokenization of assets such as corporate bonds and private credit, and to launch USDf investment tools and structured securities products to cater to the larger institutional demand.

Conclusion

With the official launch of trading for Falcon Finance on mainstream CEXs, the stablecoin market welcomes a new player with a unique background and grand vision. Its positioning as a "universal collateral infrastructure" goes beyond the mere category of stablecoins, attempting to bridge the gap between traditional financial assets and DeFi.

However, the challenges ahead remain numerous - the uncertainty of regulatory frameworks, intense competition, and unknown market risks will not disappear. But there is no doubt that Falcon Finance has brought a new imaginative space to the crypto assets market: a future where any asset can efficiently generate returns.