FAQ
Minting/ Redeeming USDf
How can I mint USDf?
Start by completing KYC verification to ensure compliance and security.
Once approved, connect your wallet to the Falcon app.
Deposit a variety of assets from stablecoins and non-stablecoins, such as USDC, USDT, FDUSD, BTC, ETH and many more.
Falcon will then verify the collateral, confirm receipt, and release USDf to your wallet.
How do I redeem USDf to other tokens?
Users who have completed KYC verification can redeem USDf for other supported stablecoins and non-stablecoins.
A 7-day cooldown period applies before tokens are credited to your Falcon assets.
To reclaim your tokens from Falcon assets to your wallet address, initiate a withdrawal to transfer them to your wallet address.
Who bears the cost of minting/redeeming?
Users bear the cost of minting and redeeming USDf. Gas fees and execution costs are passed directly to users. Falcon Finance does not charge protocol-specific fees for these transactions.
Do I have to KYC in order to deposit/ withdraw and mint/redeem USDf?
Yes, all users who wish to mint and redeem USDf through Falcon Finance must be KYC verified. In the future, users will be able to acquire USDf via other decentralized protocols and centralized exchanges.
Is Falcon only supported on Ethereum?
For Beta version, USDf is deployed on Ethereum as a start, we will soon be supporting other chains.
Can I deposit other collaterals to mint USDf other than the ones listed?
Yes, if you wish to deposit bluechip or altcoins not currently listed on the Falcon app, please contact us at support@falcon.finance, and our team will assist you accordingly.
When I deposit my collateral to mint USDf, where does it go?
Your deposited collateral is securely stored through Falcon’s comprehensive custody framework. This includes off-exchange solutions with qualified custodians, Multi-Party Computation (MPC) and multi-signature schemes, and hardware-managed keys. These measures ensure your assets remain secure and accessible.
Yield Accrual
What is sUSDf?
sUSDf is a yield-bearing token minted by staking USDf on Falcon Finance. It is designed to accrue value over time through Falcon's diversified, institutional-grade yield generation strategies.
How do I stake USDf to mint sUSDf?
Deposit USDf into the Earn module on Falcon. This locks your USDf and initiates the minting process for sUSDf.
sUSDf is minted based on the current sUSDf-to-USDf value, which reflects the total supply of sUSDf relative to the total USDf staked and accumulated protocol yield in USDf.
As Falcon generates yield through multiple trading strategies, the sUSDf-to-USDf value increases. This means your staked USDf generates yield which indirectly causes the appreciation of sUSDf.
sUSDf can be held for passive yield accrual or restaked for fixed-term boosted yields.
How can I earn APY through Falcon?
Stake USDf to Mint sUSDf:
Stake USDf on Falcon to mint sUSDf, a yield-bearing token.
Users earn a base yield, calculated based on a 7-day trailing APY derived from the protocol’s performance.
The value of sUSDf increases over time as yield accrues through Falcon’s yield generation strategies.
Boost Your Yield with Restaking sUSDf:
Restake sUSDf into fixed tenures of 3 months, 6 months, or other durations to earn boosted yields.
When restaking, Falcon issues an ERC-721 NFT to your wallet, representing the locked sUSDf and lock-up duration. This NFT accrues additional yield over the lock-up period.
Can I withdraw my assets at any time?
Yes, fully KYC-verified and whitelisted users can redeem USDf on demand.
Redeemed assets are subject to a 7-day cooling period before the original collateral becomes available for withdrawal.
The cooling period ensures proper settlement and asset processing.
How does Falcon generate yield?
Falcon Finance expands on traditional synthetic dollar designs by integrating diversified collateral, including stablecoins, blue-chip tokens, and select altcoins, allowing the protocol to capitalize on distinct yield opportunities offered by various asset classes.
Its institutional-grade yield generation strategies go beyond delta-neutral basis spreads and funding rate arbitrage, employing advanced statistical arbitrage algorithms to ensure consistent, risk-adjusted returns. These strategies leverage exchange arbitrage opportunities, exploiting micro market structure inefficiencies and funding rate variations while maintaining a delta-neutral position.
By combining this robust approach with overcollateralized assets, Falcon Finance delivers sustainable and scalable yields across varying market conditions.
Risk Management
How does Falcon manage risks?
Falcon combines automated systems and manual oversight to actively monitor and manage trading positions in real time. Automated systems continuously evaluate positions against risk thresholds and manual oversight by Falcon’s seasoned trading desk ensures an additional layer of evaluation and adjustment.
During heightened market volatility, Falcon leverages the expertise of its seasoned trading desk and advanced infrastructure to strategically unwind risks.
Falcon continuously monitors market conditions, allowing for dynamic adaptation of strategies to mitigate risks and optimize yield generation during varying market scenarios.
In addition, Falcon ensures full operational transparency through detailed quarterly and annually Proof of Reserve (PoR) reports, consolidating on-chain and off-chain data, including collateral held by qualified custodians, balances on DEXs, CEXs, and protocol wallets. Independent third-party audits validate collateral adequacy, trading strategy compliance, and security protocols, including multi-signature schemes and MPC solutions. Users can access a real-time transparency dashboard displaying metrics such as Total Value Locked (TVL), the volume of sUSDf issued and staked, and the amount of USDf issued and staked.
Falcon commissions ISAE 3000 assurance reports to assess security, availability, transaction integrity, and privacy, reinforcing its commitment to trust and accountability.
How does USDf aim to maintain its peg?
USDf is an overcollateralized synthetic dollar created when users deposit eligible assets into Falcon Finance.
For stablecoin deposits, USDf is minted at a 1:1 USD value ratio, ensuring straightforward stability. For non-stablecoin deposits such as BTC, ETH, or SOL, an overcollateralization ratio (OCR) is applied to account for potential market volatility and maintain full collateral backing.
The OCR acts as a buffer, safeguarding the protocol against market fluctuations while enabling Falcon to leverage a diverse set of yield-generating strategies. This dual benefit ensures USDf remains secure, robust, and optimized for user returns.
Operational Jurisdictions and Compliance
Who may use Falcon’s mint / redeem services?
To use the Services, you must be 18 years of age or older and must not be a "Prohibited Person." A "Prohibited Person" is any individual, entity, or organization that is listed on any U.S. Government sanctions or restricted parties lists, including the U.S. Treasury Department's list of Specially Designated Nationals (SDN) or the U.S. Department of Commerce Denied Persons List or Entity List. It also includes individuals or entities listed on the European Union's consolidated list of persons, groups, and entities subject to financial sanctions, the United Kingdom's Consolidated List of Financial Sanctions Targets, or Switzerland's respective sanctions lists. Additionally, a "Prohibited Person" is any individual or entity located, incorporated, or organized in a country subject to U.S. embargoes or designated by the U.S. Government as "terrorist-supporting."
The term also applies to any individual or entity that is otherwise restricted under the laws of the United States, the European Union (or any of its Member States), the United Kingdom, Switzerland, or any other applicable jurisdiction. Furthermore, any person or entity owned or controlled by individuals or organizations listed as "Prohibited Persons" also qualifies as a "Prohibited Person." The Company may use tools such as IP-based geofencing or other technologies to enforce these restrictions. By accessing or using the Services, you confirm and represent that you are not a "Prohibited Person."
What are the restricted jurisdictions for Falcon’s mint / redeem services?
We are not able to provide service for clients in Algeria, Afghanistan, Burma (Myanmar), Central African Republic (CAR), Crimea, Cuba, Democratic People’s Republic of Korea (North Korea), Democratic Republic of the Congo, Islamic Republic of Egypt, Eritrea, Guinea, Guinea-Bissau, Lebanon, Liberia, Libya, Mali, Iran, Morocco, Nepal, Nicaragua, Republic of Belarus, Russian Federation, Somalia, South Ossetia, South Sudan, Sudan, Syria, Ukraine (Donetsk and Luhansk regions), United States of America, Venezuela, Yemen, Zimbabwe. The Services are also unavailable in any jurisdiction where access is prohibited by applicable laws or is subject to sanctions or embargoes imposed by the United States, the United Nations, or other relevant authorities. Falcon reserves the right to add any additional jurisdictions at any time and without prior notice.
Is Falcon offered in the U.S?
No, users in the US are not permitted to mint or redeem USDf directly from Falcon. US based users will still be able to participate in staking USDf to mint sUSDf and earn competitive yields.
Is holding USDf onchain permissionless?
Yes, USDf is a globally accessible, permissionless synthetic dollar.
What components of the protocol are subject to KYC/AML screening?
Minting and redeeming of USDf, along with depositing and withdrawing assets will be subjected to KYC/ AML verification. Staking of USDf to mint sUSDf do not require KYC/AML verification.
How does Falcon's insurance fund work?
Falcon's insurance fund is an on-chain, verifiable reserve designed to protect users and enhance system stability.
A portion of the protocol’s monthly profits is allocated to this fund, which grows alongside Falcon’s adoption and TVL. During times of market stress, the fund acts as a "bidder of last resort," purchasing USDf in open markets to maintain stability and mitigate risks. In addition, the fund covers rare instances of negative or zero yields, ensuring continuous support for users.
Managed through a multi-signature setup involving Falcon’s internal team and external contributors, the fund is transparent, secure, and integral to the protocol’s resilience.
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