To be honest, I used to have concerns about on-chain lending protocols. I was worried about complexity, pitfalls, and security issues. It wasn't until I actually used them that I realized many of these fears are just instinctive reactions to unfamiliar things.

Think about it this way: you hold BTCB, BNB, or ETH, planning to hold them long-term, right? Doing nothing with these assets actually incurs the most hidden cost. These assets could be working for you.

On some leading lending protocols, you can use these coins as collateral and borrow stablecoins like USD1 at extremely low interest rates (around 1%). The key point here is—these borrowed stablecoins are not just stored; they can be directly invested into the platform’s financial products, which can yield up to 20% annualized return. Do the math: you pay 1% borrowing cost but earn 20% on your funds. This calculation is clearly profitable.

Even more interesting are assets that generate automatic interest, such as PT-USDe, asUSDF, or USDe. Using them as collateral to borrow stablecoins creates a combination of “original assets continuously earning interest, while borrowed stablecoins earn 20%.” One amount of money yields multiple streams of income—this is true capital efficiency.

Some protocols also offer tools like slisBNB or similar interest-earning instruments, allowing you to participate in Launchpool, Megadrop, and other opportunities, with even a chance of airdrops. In other words, you're not just doing a single lending operation but capturing the entire ecosystem’s yields.

Of course, this approach isn’t completely risk-free. Monitoring collateralization ratios is crucial—if market volatility is high, liquidation risks become imminent. So, keep a clear head, regularly adjust your positions, and that’s the way to sustain long-term activity.

Have you wondered why these protocols can lock in assets worth billions of dollars? It’s because they’ve found a balance point: providing decent returns for borrowers while offering good rewards to depositors. On the chain, efficiency is always the hardest currency. Whoever can leverage the most with the least risk wins.