DWF Labs and Falcon Stable are taking steps to dispel allegations of bad assets and low-quality backing for their USDf stablecoin.
DWF Labs and Falcon Stable Defense
Andrei Grachev, founder of DWF Labs, asserted that the USDf project is collateralized by cryptocurrencies worth over $565 million, covering 89% of the total portfolio. The remaining 11% consists of alternative tokens. Grachev pointed out that the overall collateralization ratio is 116%, and the total supply of USDf amounts to $542.2 million, reportedly well-backed by assets.
USDf and the Effect of Volatile Tokens
The collateral for USDf is not uniform, as volatile tokens like Official Trump (TRUMP) are also accepted as collateral. This raises concerns among social media analysts, as such volatile assets may negatively impact the stability of the stablecoin. This situation is reminiscent of issues faced by other stablecoins like TerraUSD.
Overall Risks and Stability of USDf
Concerns arise regarding the mixed collateral backing USDf, especially following its recent dip to $0.99. While USDf overall has a minimal impact, such fluctuations could complicate the circumstances for DWF Labs and World Liberty Fi. Details about collateral are presented in a generalized format, complicating risk analysis.
DWF Labs and Falcon Stable must now highlight specific details about their collateral to restore confidence in USDf and minimize risks for investors.
