2026-01-07 18:21:45

Many people are curious, why can some platforms' lending interest rates be pushed down to 1%? There is actually a trick behind this.

Taking a certain mainstream stablecoin platform as an example, their ability to maintain a 1:1 peg with the US dollar relies mainly on over-collateralization combined with an algorithmic mechanism. Users collateralize blue-chip assets to exchange for USD1 for use, and throughout the process, the platform incentivizes liquidity providers through governance tokens. This effectively reduces the overall cost structure of lending.

What is the result? The interest rate for lending USD1 can be stabilized at around 1%. For users who need long-term stablecoin positions, this offers a clear cost advantage compared to traditional lending channels. The key lies in how the platform designs this incentive mechanism to encourage participants to provide liquidity, thereby creating a virtuous cycle. The development direction of stablecoins seems to be moving toward lower costs and higher efficiency.

USD1-0.03%

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OldLeekMaster

· 10h ago

1% lending interest rate? It depends on how the platform's incentive mechanism is designed; it could easily lead to a collapse.

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AirdropHustler

· 01-07 18:51

A 1% interest rate sounds great, but you need to understand the underlying logic clearly. Governance token incentives are basically about throwing coins to exchange for liquidity; sooner or later, someone will take the bait. Wait, over-collateralization still yields 1%? How is that calculated? Is this data reliable? Stablecoins are becoming more competitive; it feels like everyone is playing a capital game. It's really hard to say how long this mechanism can run; I've seen too many seemingly perfect models eventually collapse.

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BTCRetirementFund

· 01-07 18:40

A 1% interest rate? It doesn't sound that outrageous anymore. The key is still designing a sufficiently aggressive incentive mechanism. This combination of over-collateralization and governance tokens does have some merit, but you also need to guard against de-pegging risks. To put it simply, it's the cheapness created by token subsidies—how long the platform can sustain the burn rate that matters.

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MetaverseHermit

· 01-07 18:39

1% interest rate? That sounds a bit too good to be true; I need to look at the actual data.

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WhaleStalker

· 01-07 18:39

A 1% interest rate is really amazing; this mechanism has indeed been figured out. The real profit-makers are probably the ones who withdraw liquidity... Over-collateralization sounds stable, but who bears the liquidation risk? Once the incentive mechanism loses participants, it collapses. It looks so perfect that it's a bit scary. Will the governance token dilution happen very quickly? I'm a bit worried about how long this route can last. A 1% rate is indeed attractive, but the unavoidable risk is centralized risk. Is the algorithmic mechanism reliable? Could it be the next Luna?

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MoonBoi42

· 01-07 18:37

1% interest rate? This incentive mechanism is really clever; liquidity mining is just that competitive.

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