On-chain liquidity has always been a dilemma—either being forced to sell assets for liquidity or missing out on potential gains. Recently, I came across a project called Falcon Finance that is attempting to solve this predicament in another way.

Its core idea is quite interesting: it allows you to use various assets as collateral, whether digital tokens or tokenized real assets. This way, your assets can be activated and utilized, rather than being idle or forced to be liquidated. With these collateral, you can mint USDf—a hyper-collateralized synthetic dollar. This not only provides on-chain liquidity but also preserves your existing positions, so you don’t have to worry about liquidation risks.

From a mechanistic perspective, the project adopts an over-collateralization model to ensure system stability, and has undergone rigorous auditing. The ecological aspect is also rapidly unfolding, with more and more DeFi protocols starting to integrate USDf, gradually opening up scenarios from lending to payment. The actual feedback from the community is also positive, with everyone sharing their real usage experiences.

To be honest, this design approach really addresses the pain points - ensuring security while providing flexibility. As more applications are integrated, it could become an important part of on-chain financial infrastructure. This way of making assets more flexible and returns more relaxed is a tangible need for many users.