What is Falcon USD (USDf)? - Bitfinex blog
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13 May What is Falcon USD (USDf)?

Posted on 13 May 2025 in Education, Token by

USDf, the synthetic stablecoin developed by Falcon Finance, represents an overcollateralised digital dollar that aims to combine security, flexibility, and sustainability in its design. Unlike traditional stablecoins, USDf is not pegged to fiat by direct reserves but is instead minted against a diversified set of collateral assets. These include both stablecoins like USDC and USDt, as well as more volatile cryptocurrencies such as BTC and ETH. Falcon aims to ensure that every USDf issued is backed by assets exceeding its value, using a dynamic overcollateralization ratio to account for volatility and market conditions, thereby enhancing the system’s ability to maintain price stability during market turbulence.

One of USDf’s distinguishing features lies in its dual minting mechanisms: Classic Mint and Innovative Mint. The Classic Mint allows users to deposit stable or non-stable assets, receiving USDf either at a 1:1 rate or through an overcollateralised process, depending on the asset’s volatility. The Innovative Mint, aimed at more experienced users, introduces fixed-term deposits and predefined price parameters, while safeguarding the protocol through liquidation thresholds. This layered approach accommodates varying risk appetites and strategies, expanding the token’s use cases across different user segments.

Peg stability for USDf is maintained through a blend of delta-neutral trading strategies and cross-market arbitrage opportunities. Falcon deploys user collateral into centralised and decentralised venues, while ensuring that price movements in collateral assets do not affect the dollar value of USDf. To further support its peg, users can engage in arbitrage when USDf trades above or below $1 on secondary markets, creating a market-driven feedback loop to anchor its value.

Trade USDf Now

Falcon’s architecture positions USDf as a synthetic dollar designed not only for stability, but also for flexible utility and sustained performance in a range of DeFi contexts.

Learn more on Falcon Finance here. 

What is the USDf Token?

USDf plays a central role in the Falcon Finance ecosystem as its foundational unit of account and a synthetic dollar. USDf enables users to unlock stable, on-chain liquidity from a wide array of crypto assets without needing to sell them. This allows participants to maintain exposure to their underlying holdings while accessing dollar-denominated value that can be staked, restaked, or used in broader DeFi applications within and beyond the Falcon platform.

USDf functions as a stablecoin alternative with an overcollateralisation model that aims to ensure that every minted token is backed by collateral of equal or greater value. 

USDf contributes to the overall sustainability and scalability of the Falcon protocol by supporting liquidity mechanisms and peg stability efforts. The system allows arbitrage opportunities that help maintain USDf’s dollar parity across markets, while redemptions and minting processes are designed to uphold collateral integrity and user trust. As such, USDf is more than just a synthetic stablecoin, it is the linchpin of Falcon Finance’s architecture, enabling a seamless flow of value and financial utility throughout the platform.

USDf Tokenomics

USDf’s tokenomics are built around a model of overcollateralisation, which is intended to require that each unit of USDf is backed by assets exceeding its issued value. Users can mint USDf by depositing either stablecoins (e.g., USDT, USDC) at a 1:1 ratio or non-stablecoin assets (e.g., BTC, ETH) with a risk-adjusted overcollateralisation ratio (OCR). These OCRs are dynamically calibrated based on factors such as asset volatility, liquidity, and market behavior. This approach mitigates systemic risk, enhances collateral security, and provides a buffer against market downturns. In the event of extreme price volatility, the protocol includes liquidation mechanisms to preserve the backing of USDf and uphold the integrity of the peg.

How to buy USDf with crypto

1. Log in to your Bitfinex account or sign up to create one.

2. Go to the Deposit page.

3. In the Cryptocurrencies section, choose the crypto you plan to buy USDf with and generate a deposit address on the Exchange wallet.

4. Send the crypto to the generated deposit address.

5. Once the funds arrive in your wallet, you can trade them for USDf. Learn how to trade on Bitfinex here.

How to buy USDf with fiat

1. Log in to your Bitfinex account or sign up to create one.

2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.

3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.

4. Check your Bitfinex registered email for the wire details.

5. Send the funds.

6. Once the funds arrive in your wallet, you can use them to buy USDf.

Also, we have Bitfinex on mobile, so you can easily buy USDf currency while on-the-go.

[AppStore]  [Google Play]

USDf Community Channels

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