Remember the feeling of being forcibly liquidated? Borrowing stablecoins by staking ETH, and when the price drops, your position is gone.

But look at it from a different angle: if you can hold BTC while also gaining liquidity in stablecoins, you don't have to worry about being liquidated—this may sound like a fantasy, but there are protocols actually doing this.

**Key Shift: From "Borrow" to "Swap"**

Traditional approach: you lock in $150 worth of ETH and exchange it for $100 worth of stablecoins. This transaction is essentially a debt relationship—you pay interest, and when the price drops, you face liquidation risk. The opponents you’re fighting against are market volatility and liquidation thresholds.

What’s the new idea: you deposit $150 worth of BTC, and the protocol mints $100 worth of USDf stablecoins for you. But this isn’t borrowing—more accurately, it’s a transformation of asset form. No debt, no interest, and no looming liquidation threat. What about the remaining $50 worth? The protocol handles it behind the scenes with hedging strategies (like delta-neutral operations). You’re simply lending your assets to the protocol in exchange for a more liquid form, and you can redeem it anytime when you want to get your assets back.

**Who Bears the Risk**

This is the fundamental difference.

In other protocols, the risk is borne by the user; here, the risk is handled by the protocol’s hedging engine. Your sleep quality is no longer dictated by market fluctuations but depends on the protocol’s risk control level.

**Multiple Revenue Mechanisms**

Compared to stablecoin schemes that only earn from funding rates, these protocols have more diverse income sources. They not only profit from hedging operations themselves but can also create value through other strategic layers—how exactly they operate depends on each protocol’s design. This means that even when the market is volatile or funding rates disappear, the system can still function.