USDF Stablecoin Briefly Loses Dollar Peg Amid Transparency Concerns

Falcon Futures' USDF stablecoin, backed by DWF Labs, experienced a sudden depegging event, dropping to 94.3 cents before recovering. The incident has intensified scrutiny over the project's opaque reserve structure despite claims of 116% over-collateralization.

On-chain liquidity for USDF appears to be evaporating rapidly, with only $25 million verifiable on-chain versus $609 million held in undisclosed off-chain reserves. Falcon's audits notably omit details on collateral composition, liquidity profiles, or price risk factors—raising red flags about asset quality.

The stablecoin had achieved a $570 million market cap within months of launch, fueled by its DWF Labs partnership. Market observers now question whether the project's rapid growth outpaced its governance frameworks, as Twitter analytics platform Parsec highlighted the depeg in real-time.