Many people think that the cryptocurrency market is just a high-risk betting arena, until they actually get involved in DeFi and realize that the mechanism design here is quite interesting. Recently, many around me have been trying a combined strategy involving USD1 stablecoin and governance tokens of certain DeFi platforms, and the results have been pretty good.

USD1 is a stablecoin pegged to the US dollar, while governance tokens are tools used by some DeFi projects to incentivize users and distribute profits. Looking at these two separately, there's nothing particularly special, but combining them makes the logic quite intriguing.

The operation process of this approach is as follows: users first deposit mainstream cryptocurrencies supported by the platform as collateral, then borrow a batch of USD1 stablecoins. Next, they redeposit the borrowed USD1 into the platform to participate in liquidity mining, earning governance token rewards. Simply put, it's collateralizing assets to borrow stablecoins, then using those stablecoins to mine.

Why do platforms design such a model? Frankly, the platform's goal is to expand asset scale and trading depth. USD1 plays the role of "liquidity blood" in the ecosystem—lending, storing, trading—all require its circulation. Governance tokens act like a "carrot," attracting users to participate deeply, locking more assets, and increasing the overall liquidity and activity of the ecosystem. To earn more governance tokens, users naturally continue to increase their operations and investments on the platform, forming a mutually reinforcing cycle.

The brilliance of this model lies in how it aligns the interests of participants and the platform through incentive mechanisms. However, it's also important to recognize that such high returns usually come with corresponding risks, including smart contract risks, liquidation risks, market volatility risks, and more.