Recently spent quite some time testing the minting functionality of a leading DeFi protocol. Speaking of which, this system does have some real features when it comes to collateral support—BTC, ETH, various small tokens, and even on-chain gold tokens like XAUT can be used to mint stablecoins USDf. I agree with this approach; it’s much more flexible than traditional stablecoins that rely on single collateral or pure algorithmic models. Choosing over-collateralization also makes sense from a risk control perspective.

However, when it comes to actual operation, the issues arise. Under standard conditions, swapping stablecoins 1:1 for USDf is straightforward. But what if you use non-stablecoin assets? The calculation logic becomes more complex. I did a test with 0.5 ETH when the market was around $3420. Using the simplest algorithm, I should have been able to mint about $1710 worth of USDf. But what happened? The system only issued a little over $1450. Later, I figured out—they dynamically adjust the over-collateralization rate based on the asset’s volatility, and even relatively stable assets like ETH need a safety margin of 15 to 20%. Logically, this design makes sense, but for users who want to squeeze every penny out of the system, it becomes a barrier.

What’s even more frustrating is that innovative minting model. It sounds quite attractive—you lock non-stable assets for a period, and the system gives you different minting multipliers based on the lock-up duration. I chose a 6-month term, thinking it would improve capital efficiency, but I found that the calculation formula for the strike multiplier isn’t clearly explained in the official documentation.