2026-01-08 03:30:38

The world is entering a rate-cutting cycle, with the Federal Reserve's policy clearly shifting, and traditional dollar-based wealth management and US Treasury yields continuing to decline. Interestingly, the crypto market is operating in the opposite direction—bullish expectations are fueling strong demand for funds, leading to an inverted on-chain and off-chain interest rate phenomenon.

Against this backdrop, protocol stablecoins like USD1 have instead become tools for profit-making. Why? Consider these points:

**Ultra-low-cost leverage**. Usually, rate cuts lower the cost of capital, but DeFi lending markets often see interest rates driven up by speculative demand. USD1 is different—through protocol incentives and mechanism design, it artificially pushes lending rates down to around 1%. Think about it this way—if others borrow at 8%, and you only pay 1%, you’re already ahead.

**Rigid wealth management yield demand**. No matter how volatile the market, the demand for stablecoin-based wealth management remains strong. A leading exchange, to maintain platform liquidity competitiveness, will inevitably keep USD1 wealth management yields well above US Treasury levels. This "low-interest borrowing, high-interest depositing" arbitrage window is becoming increasingly rare in a rate-cutting cycle.

**Multiplier effect of ecosystem growth**. As the BNB Chain ecosystem gradually recovers, the application scenarios for USD1 as a core stablecoin are exploding. Trading, lending, liquidity mining… the thriving ecosystem directly boosts demand for stablecoins, creating a positive feedback loop.

The underlying logic is simple: seize the window of macro interest rate inversion, and act when leverage funds are cheapest and wealth management yields are most lucrative.

USD1-0.03%

BNB0.02%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

23 Likes

Reward
23
11
Repost
Share

Comment

0/400

ImpermanentSage

· 01-11 02:55

1% lending rate? That interest rate gap window is indeed outrageous, no wonder everyone is rushing to USD1. 2. Wait, the arbitrage window during the interest rate cut cycle is becoming increasingly rare... That sounds a bit harsh, does it mean there’s not much time left? 3. I agree with the concept of rigid demand, but how many people can truly benefit from this wave of dividends? 4. On-chain interest rate inversion is ridiculous; this is the real arbitrage paradise. Unfortunately, late discoverers are just bagholders. 5. Is USD1 now the most scarce asset during the interest rate cut cycle... This logic is actually quite clear. 6. Borrow at low interest and deposit at high interest, sounds simple, but nobody knows when this window will close. 7. BNB ecosystem recovery pushes USD1? Feels a bit tied to it; what if the ecosystem cools down later? 8. Others get 8%, I get 1%, isn’t this the most straightforward reflection of the interest rate cut dividend? 9. Rare arbitrage window... Is it hinting to buy the dip? Or is it saying a bubble is coming? 10. Financial returns far surpass US bonds, which is indeed outrageous in this era, but sustainability is a concern.

View OriginalReply0

GateUser-c802f0e8

· 01-09 10:20

Wait, is the 1% lending interest rate real? That must be some powerful incentive mechanism, it feels a bit too fantastic.

View OriginalReply0

OPsychology

· 01-08 10:24

You can actually make money during a rate cut cycle, this logic is indeed brilliant... However, can protocols like USD1 really stay stable? It feels a bit too idealistic.

View OriginalReply0

CryptoMabuS

· 01-08 04:17

All the news add up

View OriginalReply0

GasFeePhobia

· 01-08 03:59

1% lending rate? How is that possible? Could it suddenly drop to zero someday? How long can this arbitrage window last? It always feels like there's a trap behind every pie in the sky. Can USD1 really stay stable, or is it just another harvesting machine? Is the BNB ecosystem revival reliable? It feels like just empty promises. Lending at 1%, high interest on savings—why hasn't anyone mentioned how good this is earlier? Wait, is this DeFi or a pyramid scheme? I'm a bit confused. Playing this during an interest rate cut cycle feels like quick money, but in the end, you still have to pay the IQ tax. Aren't US Treasuries attractive anymore? Why is everyone rushing onto the chain? Will this inverted yield curve phenomenon last long? Or is it just a short-term arbitrage window?

View OriginalReply0

InscriptionGriller

· 01-08 03:57

1% lending rate? Isn't this just the prelude to harvesting the leeks? Once the ecosystem cools down, this arbitrage window will immediately close. --- Basically, it's just about grabbing money. Take advantage of the rate cut window to quickly harvest profits. When market sentiment reverses, USD1 will still fall into a death spiral. --- Borrow at low interest and deposit at high interest—sounds great, but the problem is, who bears this interest rate spread? The project's capital pool. --- BNB ecosystem recovery? Bro, check the on-chain data—it's still being proven wrong. --- This move really targets the greed of the leeks. A 1% cost is impressive, but it can't outrun the speed of project scams. --- Macro interest rate inversion is good, but these stablecoins on-chain are all just routines; in the long run, they will all go to zero. --- Don't be fooled by terms like "window period." This is classic capital pool setup—inevitably, it will crash.

View OriginalReply0

MoonBoi42

· 01-08 03:52

1% borrowing interest rate? Damn, this is really cutting the leeks. Others are still sleeping soundly in US bonds. 2. The interest rate inversion is truly remarkable. It feels like the window is about to close at any moment, so we need to seize the opportunity. 3. USD1 is basically just arbitraging the rate cut difference, but the ecosystem revival has to be real. Don’t let it be another air project. 4. Borrow at 1% and deposit at high interest— I understand this arbitrage logic, but what about the risks? That’s all I’ll say. 5. If the BNB ecosystem really recovers, I’ll believe it. Otherwise, it’s just another mirage like previous promises. 6. Forcing the interest rate down to 1%? That must be burning a lot of money. How long can it last is the question. 7. The interest rate cut cycle is indeed a rare window, but basically it’s a gamble that the ecosystem won’t collapse. 8. I just want to know when this yield will start to decline. Maybe it’ll cool off next week. 9. Not even beating US bonds— and you still have the nerve to say you’re winning? Wake up, everyone. 10. Borrow at low interest and deposit at high interest— this pattern sounds like mining, and in the end, it’s all for those gas fees.

View OriginalReply0

GasWrangler

· 01-08 03:50

technically speaking, that 1% borrow rate is mathematically superior to the 8% alternative—if you actually analyze the data, the arbitrage window here is demonstrably false unless the protocol maintains those incentives long-term. sub-optimal design choices in most stablecoins make USD1's mechanism look efficient by comparison, tbh.

Reply0

MissedAirdropAgain

· 01-08 03:50

1% borrowing cost is truly amazing, even US Treasuries can't match this --- This arbitrage window feels like it's only here for the next couple of years; once the rate cuts bottom out, no one can stop it --- Wait, can USD1 really stay stable? Could there be a problem with the agreement someday? --- The BNB ecosystem is really taking off, and stablecoins are indeed needed, but don't just look at USD1 --- Low-cost leverage combined with high-yield returns, the Fed's rate cuts have really created an opportunity --- The key still depends on whether exchanges are willing to provide support; otherwise, the profit potential is limited --- The concept of inverted interest rates sounds like a way to make easy money, but in practice, you need to prevent liquidation

View OriginalReply0

consensus_whisperer

· 01-08 03:46

This arbitrage window is really becoming increasingly scarce; we need to jump on it now. USD1 has indeed hit the right rhythm this time, a 1% lending rate is absolutely unbeatable in this environment. During the rate cut cycle, on-chain activity is actually the most active, which is a bit counterintuitive. The BNB ecosystem is really taking off now, and the demand for stablecoins is soaring. The yields on US Treasuries are now speechless, no wonder funds are flocking to DeFi. This low-interest borrowing and high-interest saving strategy, frankly, is just earning the interest spread—simple, straightforward, and effective. Just waiting for the ecosystem to continue recovering, and USD1 to rise with the tide. I'm a bit worried about whether this window might be overextended too quickly. The protocol incentives are well-designed, effectively suppressing market interest rates. The macro inversion indeed gives DeFi opportunities; on-chain yields are actually surpassing off-chain, it's surreal.

View OriginalReply0