Recently, I saw a major move by a leading liquidity protocol in the stablecoin sector, worth discussing.

This protocol has recently gone all-in on a compliant stablecoin ecosystem, and the synergy between the two sides is quite interesting. The stablecoin is issued by a team with a traditional financial background, fully backed by US Treasuries and cash equivalents, with custody handled by a trillion-dollar asset management firm like BitGo. From a security perspective alone, it already represents an institutional-level setup.

Market acceptance of this stablecoin is also quite high. When a large investment fund in Abu Dhabi invested $2 billion into a top-tier exchange, they directly used this stablecoin, which is the best endorsement in itself.

The liquidity protocol's approach is also very clever—setting up dedicated vaults to offer higher staking yields, while continuously improving cross-chain experience. Data shows that nearly 70% of the locked value in this protocol is linked to this stablecoin, making it a core liquidity hub within the ecosystem.

In simple terms, it's a win-win situation. The stablecoin provides real-world application scenarios and deep liquidity for the protocol, while the protocol leverages the stablecoin's compliance attributes to attract institutional funds. Whether developing new financial instruments or bringing in more institutional participants in the future, it will inject new vitality into the entire ecosystem. This kind of collaboration is considered a mature approach in DeFi.