I often see people confused about how to stay calm and hold their coins without anxiety in such a volatile market. I’ve asked myself the same question, especially after paying some tuition fees.

Initially, I thought the logic of "over-collateralization" was just a waste of funds—why lock up so much credit? It wasn’t until I was liquidated once that I truly understood—risk control systems are like seat belts. They may feel restrictive most of the time, but in critical moments, they save your life.

My approach in stablecoin protocols isn’t complicated, but it took effort to master. For example, setting the collateralization ratio—although the platform has recommended parameters, I usually leave an extra 15% safety buffer. This number isn’t based on intuition; it’s derived from backtesting extreme market conditions and the maximum single-day decline of mainstream collateral assets. The benefit of doing this is very real—it prevents being awakened in the middle of the night by margin call alerts, and my sleep quality has significantly improved.

I rarely invest all the borrowed stablecoins at once. Part of it is used for grid trading on a leading exchange, and another part flows into liquidation liquidity pools—places that provide liquidity for risky positions. This way, I can earn interest spreads and share in liquidation compensation gains. The more volatile the market, the more interesting the returns from this part become. The whole strategy gradually develops a hedging feel.

I’m quite active in governance voting, especially supporting proposals for new collateral assets. Recently, I voted to add LST assets, mainly because they have a weak price correlation with BNB, which can effectively diversify the collateral portfolio’s risk. These details are easy to overlook, but when accumulated, they form the cornerstone of stable income.