Falcon Finance Launched Bitcoin Vault: Hold Your BTC and Earn 3-5% APR

Falcon Finance launched a new offchain Bitcoin yield vault. Designed for BTC holders looking to generate income without altering their long-term position, it offers an estimated yield in the range of 3-5% APR paid in USDf, Falcon’s dollar-denominated settlement asset.

Bitcoin currently accounts for over 80% of Falcon’s protocol reserves, according to Falcon’s transparency dashboard.

“Our thesis has always been that any liquid asset should be able to generate onchain liquidity and yield. Bitcoin is the largest, most liquid asset in crypto — and it’s already the largest component of Falcon’s reserves — but until now it’s been the hardest to make productive without compromise. This vault changes that. BTC can now generate onchain liquidity without the underlying asset being wrapped or bridged,” said Artem Tolkachev, Chief RWA Officer at Falcon Finance.

Bitcoin holders seeking yield generally must either hold BTC with no yield, or sell, wrap, or borrow against it to generate income. With more than $120 billion now held in spot Bitcoin ETFs, demand for ways to make Bitcoin productive without altering exposure has become a strategic priority.

Falcon’s offchain BTC vault allows holders to stay Bitcoin while earning steady dollar-denominated income. Bitcoin deposited into the vault is not sold, converted into synthetic assets, or wrapped into onchain equivalents. Users maintain BTC exposure while receiving yield paid in USDf, which can be withdrawn onchain or used across Falcon’s DeFi integrations.

Traditional BTC yield products, including lending platforms, covered-call strategies, and wrapped-asset protocols, typically offer around 2-6% APY, but recent yield-generation sector failures highlighted custodial risk, while wrapped BTC solutions introduce bridge risk and smart contract dependencies that can limit adoption ​​among risk-sensitive allocators.

As Bitcoin's base layer does not support complex smart contracts, there is no native way to stake BTC directly on the Bitcoin blockchain. Most yield products work around this by wrapping BTC into tokenized equivalents and deploying it across DeFi protocols on other chains, introducing additional custody, bridge, and smart ​​contract risk.

Falcon takes a different approach where users complete KYC, deposit BTC into their Falcon account, and participate through the vault. Bitcoins remain within Falcon’s custody infrastructure and are not wrapped or bridged onchain. Yield is generated through offchain execution, with returns settled in USDf and credited to the user’s account.

Yield is distributed as a simple APR, with returns automatically credited to the user’s Falcon account on a regular basis throughout the lockup period. They can be withdrawn onchain, while the original BTC principal can be unstaked and returned at the end of the term.

Falcon Finance has grown to more than $2.1 billion in USDf supply, backed by over $2.3 billion in reserves including crypto blue chips, tokenized U.S. Treasuries, sovereign bonds, equities, and gold. Bitcoin is the largest component of those reserves. The protocol’s yield-bearing token, sUSDf, has distributed more than $19 million in cumulative yield since launch.

The BTC offchain yield vault is available starting today, with Falcon planning to expand similar account-based yield products for assets that require offchain execution due to technical limitations, regulatory constraints, or institutional custody requirements.