The RWA track has been extremely hot in recent years, but look at how those stablecoin projects are doing it? Most of them are playing the same game—tokenizing U.S. Treasuries. Leading projects like MakerDAO and Ondo are all betting on T-Bills. Everyone understands the logic: U.S. debt has the highest liquidity and the lowest default risk, but it’s also getting a bit crowded.

However, Falcon Finance is doing something different. They are channeling funds into loans to JAAA-rated corporate obligations (CLOs), which seems a bit counterintuitive. They’re abandoning the safest option and instead touching corporate bonds? The underlying idea is actually quite deep—they’re betting on the credit spread.

The current situation is this: the Federal Reserve’s rate-cut cycle is approaching. What does that mean? The risk-free rate, which has been high at around 5%, will start to decline. For stablecoin protocols that only hold U.S. Treasuries, this spells trouble—they’ll see yields shrink directly, making it hard to compete with staking yields in DeFi.

Corporate bonds are different. Their yield = risk-free rate + credit spread. The key is this credit spread. When the base interest rate falls, as long as the corporate credit environment doesn’t completely collapse, this spread can actually be maintained or even expand. Falcon aims to capture this extra risk premium by introducing high-rated corporate bonds. Simply put, within a safe framework (since JAAA-rated corporate bonds are relatively controllable in risk), they package the excess returns into sUSDf.

JAAA, as the highest rating for corporate bonds, has the strongest resilience in credit events. This configuration logic, in the current macro cycle, indeed offers more imagination than just holding U.S. Treasuries.