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Radhika Parashar
- WLF is looking to enhance the liquidity capabilities of the USD1 stablecoin
- The USD1 stablecoin is being prepared to perform in a more comprehensive DeFi ecosystem
- Falcon Finance is looking to build a universal collateralization infrastructure to facilitate onchain yield and liquidity servcies
World Liberty Financial (WLF), the crypto firm backed by U.S. President Donald Trump, has injected $10 million into Dubai-based banking tech firm, Falcon X. The move is aimed at enhancing the capabilities of WLF’s USD1 stablecoin.
The development was announced through an official statement on Wednesday, July 10. It said that the funding aims to improve the liquidity quotient for transactions carried out between WLF’s USD1 stablecoin and Falcon Finance’s USDf synthetic stablecoin.
While traditional stablecoins are pegged to underlying assets, synthetic stablecoins like USDf maintain their value through smart contracts and algorithmic mechanisms.
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What this entails for the two stablecoins
The WLF, controlled by members and affiliates of President Trump’s family, unveiled its USD1 stablecoin in March this year. The organization is now looking to enhance the overall capabilities of this USD-pegged token.
WLF’s investment allocated to Falcon Finance is aimed at tapping into the company’s crypto-focused technical solutions, the partnership announcement indicated.
Elaborating on the expected outcomes, the official announcement said, “the funding will accelerate Falcon’s technical integrations, focusing on shared liquidity provisioning, multi-chain compatibility, and smart contract modules for seamless conversions between USDf and USD1.”
While WLF’s USD1 stablecoin is directly backed 1:1 by real U.S. dollar assets like money market funds and cash, Falcon Finance uses varied collateral types to ensure that the USDf is always over-collateralized. As per WLF co-founder Zak Folkman, this strategic partnership will push the USD1 stablecoin into a more comprehensive DeFi ecosystem alongside the USDf.
“By combining Falcon’s innovative collateralization model with our fiat-backed approach, we are creating a more robust and flexible digital dollar infrastructure that will meet the diverse needs of both retail and institutional users across the global market,” Folkman noted.
Falcon Finance, meanwhile, is looking to build a universal collateralization infrastructure to facilitate onchain yield and liquidity services for small and large investors. The company expects that working with WLF would elevate its overall position in the market.
“This investment validates our approach to creating more efficient on-chain dollar instruments for institutional users, and WLFI’s distribution network will help accelerate adoption of our technology,” said Andrei Grachev, Managing Partner of Falcon Finance.
Status of Trump-endorsed USD1 stablecoin
Just weeks after its launch, USD1 had risen to become the seventh largest stablecoin globally. The WLF has also been working to prepare the first audit report for the UAS1 stablecoin.
As per CoinMarketCap, the present valuation of the stablecoin stands at $2.17 billion — still significantly behind the capitalizations of market mammoths including USDT and USDC among others.
