Falcon Finance Deep Dive: USDf, Miles & Yap2Fly

Published • 21 Aug 2025

Community

14 mins

In our latest livestream, Ruthy sat down with Fiona, Falcon’s Protocol Strategy Lead, to explore the big picture of Falcon Finance, from how our universal collateralization infrastructure turns idle capital into overcollateralized, yield-bearing synthetic dollars with USDf, to how Falcon Miles, Badges, and the Yap2Fly campaign are creating new ways for the community to earn and grow together in DeFi.

This blog contains the full transcript. Please enjoy!

Section 1 – Introduction

Ruthy: For anyone new here, can you give us a simple explanation - what is Falcon Finance and what problem is it solving in DeFi right now?

Fiona: Falcon Finance is a universal collateralization infrastructure that turns any custody-ready asset, including digital assets, currency-backed tokens, and tokenized RWAs, into USD-pegged onchain liquidity. Our synthetic dollar is called USDf, and recent TVL has reached $1.4bn, with $1.2bn USDf circulating supply.

By connecting onchain and offchain financial systems, Falcon provides institutions, protocols, and retail users with a simple way to unlock competitive yields from the assets they already hold.

Section 2 – USDf & Deployment Strategies

Ruthy: Let’s start with the basics. How does USDf work, and what makes it different from other synthetic dollars, particularly with its universal collateralization approach?

Fiona: USDf is an overcollateralized synthetic dollar backed by multi-asset reserves and delta-hedging strategies, pegged 1:1 to the USD. Users can mint USDf by depositing eligible collateral assets.

Our protocol backing ratio is currently at 112%, which is one of the highest in the market. The overcollateralization framework is designed to ensure that the value of the collateral consistently exceeds the value of the USDf issued, preserving its stability across different market conditions. 

As opposed to other synthetic dollars in the market, USDf can be minted with a variety of assets. This includes stablecoins (e.g., USDT, USDC, DAI) and non-stablecoin assets (e.g.,BTC, ETH, SOL, and select altcoins). As part of our mission to become a universal collateralization layer, we will be expanding the asset types like RWA to be accepted to mint against USDf. 

Ruthy: You mentioned that USDf is an overcollateralized synthetic dollar. What is that, and why is it important? 

Fiona: An overcollateralized synthetic dollar means that an Overcollateralization Ratio, or OCR, has been applied. Every USDf minted is backed by collateral exceeding one dollar in value. This helps to protect the system from price swings and market inefficiencies, making sure that every USDf minted with non-stablecoin assets is fully backed by collateral worth more. 

Each type of collateral assets has its own OCR, which is adjusted over time based on how volatile the asset is, how easily it can be traded (like is it on major CEXs), how much price slippage it tends to have (like the market depth), and its past price behavior. 

This risk-based method helps the system stay strong during market ups and downs, while still allowing users to get good value from their assets.

Ruthy: The first step for users to participate in the Falcon ecosystem is to get USDf. What are the ways for users to get USDf?

Fiona: So there are two ways that users can get USDf. First, users can mint directly on our Falcon app. 

Second, users can purchase directly from DEXes such as Uniswap, Curve, PancakeSwap, Bunni, Balancer. 

Ruthy: What are the differences between minting directly on Falcon and getting USDf directly from DEXes? 

Fiona: That’s a good question. When minting directly through the Falcon app, KYC is required, and it’s a quick process that only takes a few minutes. There’s also a minimum amount needed to mint on the app. Once verified, users can choose between two options: Classic Mint or Innovative Mint.

On the other hand, buying USDf on DEXes doesn’t require KYC or any minimum amount. You just connect your wallet to the Falcon app, and that same wallet can be used to purchase USDf on DEXes.

Both methods earn Miles, but at different rates. For example:

Ruthy: What is the difference between the two types of minting? 

Fiona: The two types of minting are Classic Mint and Innovative Mint.

With the Classic Mint, users can create USDf by depositing stablecoins, such as USDT or USDC, or non-stablecoins like ETH, BTC, SOL, and other select altcoins. However, the users will not be able to capture the upside of the collateral assets. 

When you use stablecoins as collateral, USDf is minted at a 1:1 ratio, with minor adjustments possible depending on market conditions. For non-stablecoin assets, an overcollateralization ratio is required to account for market volatility and slippage, ensuring the system remains stable and secure

On the other hand, the Innovative Mint provides a different option for users who want to mint USDf with non-stablecoin assets. In this model, users lock their crypto for a fixed term of 3 to 12 months, gaining liquidity in the form of USDf while still retaining exposure to potential upside if their assets appreciate in value.

The amount of USDf minted is determined by factors such as the lock-up period, capital efficiency, and the strike price multiplier. To safeguard against market volatility, the protocol employs market-neutral strategies along with protections like liquidation mechanisms to ensure the collateral base remains strong and secure.

Depending on price movements during or at the end of the term, outcomes vary:

Ruthy: Once USDf is procured, what routes can users take to participate in the Falcon ecosystem?

Fiona: There are several ways to engage with the Falcon ecosystem:

Holding: The simplest way to start is by holding USDf, which earns 6x Miles per day.

Staking: Users can stake USDf to receive sUSDf and earn yield. There are two options:
• Classic Yield – stake USDf for sUSDf with no lock-up and earn the base yield.
• Boosted Yield – lock USDf for 3, 6, or 12 months to earn higher yields.

DeFi Farming: Beyond staking, Falcon integrates with major DeFi platforms on Ethereum, allowing users to earn both yield and points.
• DEXes: Uniswap, Curve, PancakeSwap, Balancer, and Bunni.
• Money markets & yield tokenization: Euler, Morpho, Silo, Pendle, and more.

The quickest way to get started is by providing USDT, USDC, or USDf liquidity on DEXes like Uniswap, Curve, or PancakeSwap, where users can earn Merkl cash incentives plus 40x Miles daily.

Ruthy: How can users participate in money markets with USDf or sUSDf, and what benefits does this bring to them?

Fiona: Falcon has integrated with leading money markets such as Morpho, Euler, Silo, and Gearbox.

Money markets let users either:

Users can deposit Falcon assets into supported vaults to earn lending yields, or borrow against them. Additionally, supplying USDf or USDC liquidity for Falcon pairs earns 30x Falcon Miles.

These positions can also be used in more advanced strategies. For example, they can be looped or combined with platforms like Pendle for yield tokenization, enabling users to stack yields and maximize returns.

Ruthy: What are the opportunities for users to provide liquidity, and how do these activities fit into the bigger picture of Falcon’s growth?

Fiona: Users can provide liquidity with USDf or USDC on DEXs such as Uniswap, Curve, PancakeSwap, Balancer, and Bunni, or through aggregators like StakeDAO, Beefy, Convex, and Aura.

Falcon currently offers up to 40x Miles for DEX LPs and 2x Miles for DEX trading volume. On top of that, we’re running special campaigns to boost APYs at the moment:

Stay tuned to our social channels like X/Twitter for updates on bonus rewards and promotional campaigns.

These LP activities play a crucial role in Falcon’s growth: deep liquidity keeps USDf stable, enhances trading efficiency, attracts new integrations, and drives adoption, which are all essential for Falcon’s long-term success.

Ruthy: And separately, how can users participate in yield tokenization, and where does it fit in the bigger picture? 

Fiona: Yield tokenization protocols like Pendle let users separate and trade the future yield of their assets from the principal. This enables speculation on both yield and points.

Pendle’s AMM is built around two tokens within its liquidity pools:

When users LP on Pendle, Falcon incentivizes the SY portion daily. With USDf or sUSDf, users can provide liquidity on Pendle, Spectra, or Napier and earn Miles:

Users who want to capture upside from yields can also buy and hold YT (Yield Tokens), locking in and trading future yield:

For Falcon Finance, yield tokenization strengthens USDf’s role in advanced DeFi strategies, attracts sophisticated traders, and drives greater onchain activity.

Section 3 – Falcon Miles

Ruthy: Falcon Miles have been a big talking point - for those unfamiliar, what exactly are Miles and how do they work?

Fiona: Falcon Miles is basically our points system. Users earn Miles by doing different actions across the Falcon app and DeFi liquidity platforms. The idea is to reward core activities that grow the ecosystem.

Ruthy: What kind of actions earn Miles, and how do the multipliers work?

Fiona: You can earn Miles by minting USDf, staking, providing LP liquidity, or trading on DeFi pools. The full list with details is on app.falcon.finance/miles.

Miles use a multiplier system: the more impactful the action, the higher the multiplier on the USD value of what you do. For example, providing liquidity on Uniswap earns a 40x multiplier. So if I provide $100 of liquidity for 10 days, that’s:

$100 × 10 days × 40 = 40,000 Miles.

Section 4 – Kaito Yap2Fly

Ruthy: Let’s talk about Yap2Fly. What is it, and how can users get started?

Fiona: Yap2Fly is a strategic partnership between Falcon Finance and Kaito. It turns both your voice and your onchain activity into real rewards.

On X/Twitter, Kaito’s Mindshare engine tracks how far your Falcon insights travel, scoring originality, thoughtful engagement, and genuine reach. In the Falcon app, every action, whether it’s minting USDf, holding, staking, providing LP liquidity, trading, or joining money markets and yield tokenization, earns you Falcon Miles and helps unlock new badge tiers.

The Yap2Fly leaderboard combines both mindshare and Miles in a hybrid scoring system. Rankings unlock monthly USDf bonuses and allocations from a special rewards pool.

Ruthy: Can you explain why the leaderboard combines social mindshare with onchain Miles?

Fiona: We take Kaito’s mindshare data and index it against Falcon’s onchain activity metrics. We designed it this way because we believe rewards should reflect both sides: people sharing their views on Falcon and people actually using it. It’s a fairer way to reward participants and ensures that our most valuable contributors are both advocates and users.

Ruthy: There’s $50K in USDf given away every month to the top 50 on the leaderboard. What’s the best way for users to break into the top 50?

Fiona: The formula is simple: keep yapping with quality content, and keep building your Miles. You can check the Miles page to see which actions give the highest multipliers. And just a reminder, the leaderboard rewards are based on the Falcon Yap2Fly leaderboard, not the Kaito leaderboard.

Ruthy: At the end of the campaign there’s a Special Rewards pool. Can you share more about that, and how badges factor in?

Fiona: We definitely want to reward everyone who contributes to the community. Both Yappers and Kaito stakers will be eligible.

The top 200 on the Yap2Fly leaderboard will receive incentives, but unlocking the maximum share requires more than just ranking, you’ll also need to accumulate Miles and collect badges. Rewards follow a step-based claim mechanism, where the most committed members unlock the largest share.

Here’s how it works:

There’s a wide variety of badges tied to different activities, so no matter how you like to participate, there’s a path for everyone.

Section 5 – Falcon Badges

Ruthy: Badges have been a really fun part of the Falcon community. What are they, and how can someone earn them?

Fiona: Badges are visual milestones within the Falcon ecosystem. Each one is uniquely designed and comes with a rarity – Bronze, Silver, Gold, Diamond, or Legendary – depending on how challenging the action is to earn it. Bronze badges are the most accessible, while Gold and above are much harder to achieve.

Ruthy: Badges are tied to Miles-earning activities. What would you say are the three easiest badges for beginners?

Fiona: The easiest to start with are:

Ruthy: Badges come in different rarities. Do higher-rarity badges offer any extra perks, especially for Yap2Fly rewards?

Fiona: As we mentioned earlier, badges are important for maximizing final rewards in Yap2Fly. If you’re in the top 200 on the leaderboard or a Kaito staker, you’ll need badges across different tiers to unlock the maximum share. As for specific perks, we can’t share details yet, but I’d encourage everyone to work toward higher-rarity badges in the meantime.

Ruthy: Any hints on future or limited-edition badges?

Fiona: We recently did a giveaway on X/Twitter where 100 winners received a limited-edition Legendary badge. There may be more limited drops in the future, so keep an eye on our X/Twitter and Discord channels.

Ruthy: For someone completely new, what’s the easiest way to get started with Falcon today?

Fiona: The simplest way is to connect your wallet to Falcon, then use that wallet to get USDf on DEXes and just hold it. Buying USDf on a DEX gives you a 2x multiplier on every dollar, and holding it adds a 6x multiplier per day. That’s the most passive way to start earning Miles.

If you want to level up, you can deploy USDf as liquidity on a DEX. That’s also very easy to do and earns you a 40x multiplier per dollar of liquidity provided, per day.

Ruthy: Where can people track their Miles, badges, and Yap2Fly rank?

Fiona: Everything is on the Falcon app. You can track your Miles and badges at app.falcon.finance/miles, and see your Yap2Fly rank at app.falcon.finance/yap2fly.

Ruthy: What’s next for Falcon in the coming months?

Fiona: On the DeFi side, we’ll continue running incentive campaigns with our partners. For Kaito Yap2Fly, we’ll be distributing $50K in USDf every month to the top 50 yappers. And stay tuned, we’ll also announce more details on additional Kaito rewards soon.




Tags

USDf & sUSDf

Rewards

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