DeFi's earning opportunities are enticing, but the volatility risk is a headache. In such market conditions, stablecoin lending protocols offer a new approach—participate in yields while hedging risks.

**The "Interest Rate Anchor" Design for Stablecoins**

Some leading DeFi protocols operate through over-collateralization models. Users can use assets like BTCB, ETH, BNB, and others as collateral to borrow decentralized stablecoins USD1. The cleverest part of this system is that, because assets are fully collateralized, the borrowing interest rate can remain at a very low level—around 1%—for a long time. This stable rate acts like a traffic light, allowing you to calculate your earnings in advance.

**From Simple Arbitrage to Multi-Dimensional Yields**

The most basic approach is straightforward: collateralize assets → borrow USD1 → invest in high-yield financial products. But smart money strategies go far beyond this.

Some users leverage liquidity tokens generated from staking as collateral. This way, the earning channels stack up—receiving staking rewards from the original assets, protocol liquidity incentives, and using the borrowed USD1 for arbitrage. One investment, three sources of income, maximizing capital efficiency.

In a bull market, core investors often hesitate to sell their coins. At this time, collateralized lending becomes a "yield plus leverage" tool—holding positions steady while still earning yields.

Stablecoins are not just payment tools; they are becoming the infrastructure for DeFi users to hedge risks and amplify returns.