Falcon Finance Double Staking Launch: Significantly Increased Rewards and Voting Power for Long-Term Holders

Falcon Finance community just voted to approve the FIP-1 proposal, officially launching the dual staking structure. The core logic of this upgrade is very clear: reward long-term holders with higher yields and voting power, while reducing the impact of short-term capital on the protocol. In comparison, the yield for flexible staking has been significantly lowered, creating a clear “long-term vs short-term” incentive gap.

Major Changes to the Staking Mechanism: How to Choose Between Two Paths

The new FIP-1 proposal introduces two staking methods with very different parameters:

This comparison is straightforward. Prime staking offers 52 times the yield of flexible staking, and voting power is also 10 times greater. Falcon Finance’s design logic is: if you’re willing to lock for half a year, you can gain significantly higher returns and governance influence.

Why did flexible staking yields drop so much?

Interestingly, the yield for flexible staking has been reduced from previous levels to 0.1%. This is not just a simple adjustment but a clear signal: the protocol is redefining its incentive structure. High yields are reserved for long-term commitments, while flexible staking mainly satisfies liquidity needs.

This kind of design is common in DeFi staking, but Falcon Finance’s incentive gap is indeed quite large.

What Problem Does This Design Aim to Solve?

Enhance Governance Stability

10x voting power is very attractive for long-term holders. In on-chain governance, voting rights usually imply influence over the protocol’s direction. Through this mechanism, Falcon Finance is essentially saying: we want those who truly care about the project’s future to have greater decision-making power.

Frequent short-term capital inflows and outflows lead to unstable governance willingness. Meanwhile, those who lock for 180 days are stakeholders locked in for at least half a year, and thus more motivated to participate in good governance.

Reduce Liquidity Shock

Another perspective is capital stability. When large amounts of capital can exit at any time, the protocol faces higher liquidity risks. The lock-up period for Prime staking creates a relatively stable capital pool, which is beneficial for the protocol’s long-term operation.

Attractiveness for Different Holders

Long-term Believers

If you are optimistic about Falcon Finance’s long-term development, Prime staking is almost a must. The 5.22% annualized yield plus 10x voting power, with a 180-day lock-up, involves relatively low costs. Moreover, the quick notice explicitly states “can be withdrawn immediately after the lock-up period,” meaning no additional unlocking risks.

Short-term Traders

The yield for flexible staking has been drastically reduced from previous levels to 0.1%, making it hardly attractive anymore. This may lead some short-term capital to choose not to stake or to exit altogether. This is precisely the outcome Falcon Finance aims for.

A Noteworthy Detail

According to the latest news, this proposal has already been approved through community voting. This indicates that most Falcon Finance holders support this direction. But the actual effect will depend on participation after launch: how many will choose Prime staking? Will voting power become too concentrated? These are aspects to observe in the future.

Summary

Falcon Finance’s latest upgrade is a typical “incentive reshaping” move. By significantly widening the yield gap between Prime and flexible staking, and increasing the multiple of voting power, the protocol is guiding holder behavior through economic incentives. Long-term holders gain higher yields and stronger influence, while the appeal for short-term capital diminishes.

The success of this design hinges on whether Prime staking can attract enough funds and whether the resulting governance improvements can truly enhance the protocol’s long-term value. Monitoring participation rates and actual governance voting performance will be important moving forward.