Falcon Finance

Falcon Finance receives a C+ risk grade (42/100) from Hindenrank, where lower scores indicate lower risk. Moderate risk — Ethena competitor with improving transparency framework but structural basis-trade and off-chain custody risks remain A synthetic dollar protocol backed by DWF Labs that earns yield from trading fee differences between spot and futures markets. It grew to $1.6B in deposits rapidly with $45M in funding. The July 2025 USDf depeg (~80bps) was contained, and an independent quarterly audit confirmed 103.87% backing. Its C grade reflects basis-trade structural risks and off-chain custody dependency.

The key risks identified for Falcon Finance are: (1) The yield comes from trading fees staying positive. If they turn negative for weeks, the protocol bleeds money and the dollar peg can break — Falcon already experienced a small depeg in July 2025 (2) Your deposits are held off-chain by custodians. If the exchange holding the trading positions goes bankrupt (like FTX did), up to 30% of the backing could vanish overnight (3) Growing from zero to $1.6B in months means the system has limited stress-test history despite passing its first independent audit

Falcon Finance scores 42/100 across eight risk dimensions: Mechanism Novelty: 5/15, Interaction Severity: 10/20, Oracle Surface: 2/10, Documentation Gaps: 4/10, Track Record: 5/15, Scale Exposure: 7/10, Regulatory Risk: 6/10, Vitality Risk: 3/10. The highest risk area is Scale Exposure at 7/10.

Among 29 rated Stablecoin protocols on Hindenrank, Falcon Finance ranks #16 by safety (lowest risk score = safest). Its 42/100 risk score and C+ grade place it in the middle tier of Stablecoin protocols.

Falcon Finance scores 5/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.