Recently, stablecoin wealth management has become extremely popular, with many platforms offering annualized returns of 20% to attract users, which sounds very tempting. But savvy investors have already taken it a step further—leveraging DeFi lending protocols to amplify returns. This is the correct way to approach stablecoin wealth management.

What's the key? Ultra-low borrowing costs. On some mainstream DeFi lending protocols, using blue-chip assets like BNB or BTCB as collateral, the annualized interest rate for borrowing USD1 is only about 1%, which is basically the lowest level across the network. The process is straightforward: collateralize assets → borrow stablecoins → invest in wealth management products → earn the spread. Simple calculations show that a 20% wealth management return minus a 1% borrowing cost results in a net profit close to 19%. Plus, the entire process is on-chain, transparent, and risk-controlled, making it a risk-free arbitrage strategy.

Why not just switch to other stablecoins for wealth management? Cost. Currency swaps can cause slippage and incur fees, which are often overlooked. Borrowing via collateralized loans avoids these hidden costs, maximizing capital efficiency. Moreover, these lending protocols often have additional mechanisms—your collateral can continue to participate in liquidity staking, generating secondary income. Holding related tokens can also enjoy interest rate discounts, increased borrowing limits, and long-term platform governance dividends, expanding the profit channels.

The operational steps are actually quite simple. First, deposit your collateral (BNB or BTCB) into a DeFi protocol; second, borrow USD1 directly; third, transfer the borrowed stablecoins to a top-tier exchange’s wealth management product. The entire process is on-chain, transparent, and risks are visible at every step.

Currently, the scale of these wealth management activities is continuously expanding, and the window of opportunity is actually quite short. If you're still struggling to optimize your yield strategies, consider trying this combined approach. This is the new way to play stablecoin wealth management in the DeFi era—borrowing to generate income, making your assets work harder.