Falcon USD Stablecoin Loses Dollar Peg Amid Liquidity, Collateral Concerns - WorldNL Magazine

Concerns Mount Around New Stablecoin

Although marketed as overcollateralized with diversified crypto assets, analysts and DeFi risk monitors are raising red flags. Only a fraction of USDf’s reserves are on-chain—around $25 million—while the vast majority, roughly $610 million, is held off-chain in unspecified assets. According to Falcon’s own data, just 15% of reserves are stablecoins, while 85% are vaguely listed as “other.” The lack of transparency has prompted backlash from plat…

Falcon USD stablecoin loses dollar peg amid liquidity, collateral concerns - WorldNL Magazine

Update (July 8 at 4:01 pm UTC): This article has been updated to include comments from Andrei Grachev. Falcon USD (USDf), a synthetic overcollateralized stablecoin issued by decentralized finance (DeFi) protocol Falcon Finance, dropped below its intended $1 peg on Tuesday amid rising concerns over liquidity and collateral quality.CoinMarketCap data shows that Falcon USD (USDf) fell as low as $0.9783 on Tuesday morning. The drop triggered fresh s…

Falcon USD (USDf) Slips Below Peg as Liquidity, Collateral Worries Mount

Falcon USD is created by locking up digital assets, including volatile cryptocurrencies. The onchain liquidity for USDf has decreased, according to blockchain data explorer Parsec’s post on X. Concerns over liquidity and collateral quality caused the synthetic overcollateralized stablecoin Falcon USD (USDf) created by the decentralized finance (DeFi) protocol Falcon Finance to fall below its intended $1 peg on Tuesday. According to CMC, the valu…

Stablecoin USDf Rebounds, Falcon Details Risk Strategy

USDf rebounded from $0.8799 to $0.9905, backed by 116% overcollateralized, audited reserves. Falcon Finance generates stable yield using basis trading, arbitrage, and staking rewards. Falcon’s transparency and strict risk controls show more resilience than failed stablecoins. The algorithmic stablecoin USDf, issued by Falcon Finance, was temporarily halted recently, dropping to $0.8799 before recovering to $0.9905. The volatile collapse caused p…

DWF Labs-backed USDf depegs as red flags raised over quality of backing

Falcon USD, the rapidly growing “synthetic dollar” backed by controversial market maker DWF Labs, is faltering just months after launch. The $540 million market-cap USDf is “backed by diversified crypto assets,” but concerns over the quality of some of that collateral have led to worries about the first collapse of a major stablecoin since the implosion of Do Kwon’s UST. USDf’s price has been off-peg during the course of the morning, hitting a l…