Many people who just started with USD1 lending arbitrage have already taken a hit, mainly falling into three major pitfalls: liquidation risk, transaction fee losses, and choosing the wrong assets. In fact, these can all be avoided; the key is to understand the rules clearly.

First, let's clarify the matter of liquidation. Many think that as long as there are collateral assets, borrowing some coins to use is no problem—until market fluctuations cause the collateral ratio to spike, leading to forced liquidation. Essentially, when the price of collateral assets drops, the collateral ratio rises. Once it exceeds the 70% liquidation threshold, your position becomes at risk. How to solve this? Simply and straightforwardly—beginners should not be greedy; keep the collateral ratio well below 60%, leaving at least a 10 percentage point buffer.

Here's a practical example: you use $100,000 worth of BTCB as collateral and borrow up to $60,000 USD1. Even if BTCB's price drops by 15%, the collateral ratio only rises to 69%, which won't trigger liquidation. In extreme market conditions, there are two ways to save yourself: either continue adding collateral assets or directly repay part of USD1 to lower the ratio. Never rely on luck.

Transaction fees are also often overlooked. Gas fees on BNB Chain and Ethereum are worlds apart—BNB Chain costs just a few dollars, while Ethereum can easily cost dozens of dollars, eating into your profits. When choosing a chain, this factor must be carefully considered.

For asset selection, beginners should honestly stick to blue-chip assets like BTCB and BNB, and avoid small-cap coins and high-leverage derivatives. As for yield-bearing tokens like PT-USDe and asUSDF, although the returns are tempting, their operation processes are more complex. It's better to master basic arbitrage first before trying these out. Also, beware of fake links; always operate through official channels and avoid giving assets to phishing sites.