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The FOMO to gain entry to Falcon Finance’s closed beta is palpable. Who’d have thought stablecoins could be so exciting? Of course, it helps that institutions as well as retail have been among the early testers, with the industry-beating 22% APY to be earned serving to incentivize uptake. Now, to celebrate hitting $90M in TVL, Falcon has opened its closed beta to the community – but there’s a catch.
Five Falcons Make the List
Falcon Finance has granted beta access to just five community members. Given the level of demand for accessing the synthetic dollar protocol, this hasn’t been enough to sate the masses. But it has at least upped the excitement as community members clamored to complete the simple tasks asked of them in order to participate.
For the thousands of others champing at the bit to get involved, they shouldn’t have to wait too much longer. Falcon is readying plans to exit its closed beta, allowing the general public to participate, though has yet to announce the date when this will occur. In the meantime, things appear to be ticking over smoothly for those fortunate enough to have gained beta access.
Stable Yield as a Service
The reason why onchain users have taken such a keen interest in Falcon’s stablecoin protocol is on account of the eye-watering yield that it can generate, currently averaging over 22%. To take advantage of this, users must first deposit their crypto asset of choice – Falcon supports more than a dozen tokens including stablecoins as well as ETH, BTC, and some smaller cap assets such as POL.
After depositing funds into its protocol, Falcon issues USDf, a general-purpose stablecoin, albeit one whose primary purpose is for staking, because that’s where the yield lies. After staking USDf, users will mint a corresponding amount of sUSDf and begin earning yield on their holdings, with the ability to withdraw their assets at any time.
Transparency on Demand
Falcon has been at great pains to emphasize the transparency of its service – not least on account of the institutions it’s trying to court. It operates as a compliant DeFi platform, which means users are required to complete KYC in order to mint USDf. All of its assets are securely custodied and there are monthly audits attesting to their integrity.
As for the question of where the yield comes from, Falcon claims to use “advanced statistical arbitrage algorithms to ensure consistent, risk-adjusted returns.” Among other things, it takes advantage of arbitrage opportunities and funding rate variations while maintaining a delta-neutral position. In other words, it’s neither long or short crypto: it’s just capitalizing on pricing discrepancies as and when they arise.
So far, it’s a strategy that’s working, as shown by the rising TVL and growing waitlist. A number of institutional clients are already onboard as well as various DeFi communities. Next stop: $100M TVL and that’s before the closed beta has been concluded.
