Recently, many people have been asking me about Falcon Finance—how much of it is true or false, whether it's a stablecoin narrative or a yield game, or just another hot topic within the cycle.

To be honest, I didn't plan to spend time digging into it at first. Until one time, I noticed a very striking phenomenon: in the current environment, it’s quite rare for DeFi projects to maintain a TVL of around two billion USD. Falcon Finance happens to be one of them.

But here’s the catch—large size doesn’t necessarily mean safe and reliable. I’ve personally experienced many setbacks in this area, so this time I decided to review its entire mechanism, data flow, and recent actions over the past few months. Honestly, I stopped several times halfway through because I realized that continuing to look deeper revealed that this isn’t something you can judge at a glance.

For the following analysis, I’m not aiming to give you a standard answer. Instead, I want to transparently explain each point from the perspective of preserving as much principal as possible, based on my genuine thoughts.

Falcon’s first layer of logic is actually very straightforward—it's about USDf. You can think of it as a synthetic dollar. But be careful: don’t just look at the word “synthetic” and assume you understand it. The real core lies in how it’s generated: through over-collateralization. More importantly, the collateral isn’t just a single asset; it’s a hybrid mix of crypto assets plus some RWA (Real-World Asset) structures.

This layer only solves one problem: how to obtain USD liquidity without selling assets.

If the story stopped here, Falcon would have long become an ordinary collateralized protocol, and it wouldn’t have grown to its current scale. What truly sets it apart is the second layer—the sUSDf mechanism and the entire yield system. This is where the project’s core differentiation lies.