Updated (July 8, 4:01 pm UTC): This article has been updated, including comments from Andrei Grachev.
Falcon USD (USDF) is an overcomplementary stable STABLECOIN issued by the Decentralized Financing (DEFI) protocol Falcon Finance, which saw an expected $1 nail drop on Tuesday as concerns about liquidity and accompanying quality continue to rise.
CoinMarketCap Data show That Falcon (USDF) fell to $0.9783 Tuesday morning. The decline has sparked new scrutiny from the Defi community, with some industry observers questioning the support and governance of tokens.
Alex Obchakevich, founder of Obchakevich Research, told Cointelegraph that he was “concerned about this situation”, adding that rumors about the accompanying quality issues undermined investor confidence.
Different from the stable protein supported by Fia Bass (USDC) (USDC) (USDC) or USDT (USDT), Falcon USD is not directly fixed with US dollar deposits in a bank account, but is minted by locking in digital assets including volatile cryptocurrencies.
Blockchain Data Explorer Parsec Report OnChain liquidity on USDF has declined on X. PARSEC data instruct At the time of writing, this liquidity is $5.51 million.
“Blockchain data shows a sharp drop in liquidity, which only increases panic,” Obchakevich quoted Parsec data.
Related: How and why stablecoins depeg?
Falcon Dollar Issuer Response
Andrei Grachev, managing partner of two Falcon Finance supporter DWF Labs and Stablecoin issuers themselves, released a lengthy x postal Respond to the allegations. He claims Stablecoins and Bitcoin (BTC) accounts for 89% of collateral (about $565 million) and about 11% (about $67.5 million) are altcoins.
Grachev also said that USDF exceeded 116%. To manage risk, Falcon Finance only uses a market-neutral strategy to generate revenue without directional trading, “Every minted USDF must be backed by stable coins or hedge positions that represent the value of the dollar and have no directional risk,” Grachev said.
He added that USDF’s PEG is organically maintained by traders. If the price of Stablecoin is more than $1, the trader can mint and sell it, while the trader can buy and redeem if it is less than $1.
“Although market sentiment drives a brief DEPEG, the market has stabilized and recovered,” Grachev said, adding that the company “actively works with multiple trading institutions to strengthen the nails.”
Proof of assets shared Using Cointelegraph, the stablecoin has nearly $544 million in assets. However, no details are provided about specific assets that support stability. Cointelegraph has not independently verified the report.
Related: What’s wrong with Susd? Stabilizer for cryptocurrency
Community Challenges Falcon’s Proposition
Obchakevich told Cointelegraph that the post raised many questions. For example, he disputes the claim that Falcon Finance has “no other choice” for being “too optimistic” and “marketing strategy.” He said:
“Competrators like DAI or USDC have good positions with larger reserves and a wider user base.”
Others are not very diplomatic. pseudonym developer 0xlaw, manage farming agreement financing, defendant Falcon holds the finances of “ten millions of dollars in bad debt” and calls USDF “A Scam” in an article on X.
According to 0xlaw, USDF is allegedly backed by under-liquid assets, including mobile tokens for a large number of sports networks. Co-suspension of mobile transactions in Maythe reason does not meet the listing standards.
Defi research group Llamarisk’s separate risk assessment, publishing In late May, additional red flags were added. The report notes: “The Falcon team has unilateral authority over the operational management of reserve assets.” The report also asserts possible over-problems:
“Using Dolo as collateral can mint up to 50,000,000 USDF, exceeding Dolo’s market value.”
The report also marked concerns about lost disclosures, including the lack of a total reserve asset decomposition and inaccessible insurance funds.
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