Falcon USD stablecoin decouples, raising concerns about liquidity and collateral quality

ChainCatcher news, according to Cointelegraph, the over-collateralized stablecoin Falcon USD (USDF) issued by the DeFi protocol Falcon Finance fell below the $1 peg on July 9, reaching a low of $0.9783. Data shows that the on-chain liquidity of this stablecoin has dropped to $5.51 million, shrinking by over 80% from its peak.

Andrei Grachev, managing partner of Falcon Finance, responded that 89% of the collateral for USDF consists of stablecoins and Bitcoin, with an over-collateralization rate of 116%. However, the DeFi research institution LlamaRisk reported that the project team has unilateral management rights over the collateral assets, and there is a risk of over-issuance.