The Bank of Japan is considering raising interest rates, and global financial market liquidity is gradually tightening. Against this backdrop, Bitcoin and other risk assets are facing significant volatility pressure. Investors urgently need to find asset strategies that can both preserve value and generate returns. The USD stablecoin USDD, based on blockchain technology, is gradually becoming an ideal choice to cope with market volatility.

Why does USDD perform well during interest rate hike cycles? There are three main reasons.

**First is the double guarantee of over-collateralization.** USDD is over-collateralized with more than 200% of crypto assets, which means that even if Bitcoin experiences a 50% crash, the underlying assets can still fully cover the total issuance of USDD, ensuring safety. This over-collateralization design is simple—using redundancy to achieve stability.

**Second is the flexible yield mechanism.** Users holding USDD can enjoy high on-chain yields (annualized returns starting from 10%), and the redemption process allows direct access to USD value, completely unaffected by delays caused by traditional central bank policy adjustments. In a rapidly changing market, this immediacy is especially valuable.

**Third is the extremely low usage cost.** Relying on the Tron network, USDD supports instant transfers, with transaction fees below $1. Whether institutional investors or retail users, they can participate in liquidity management in the most efficient way.

In the current market environment, investors can respond as follows: First, convert part of their positions into USDD, to wait for a market rebound while earning stable returns. Second, when clear trading opportunities arise, quickly exchange USDD for other assets; on-chain operations have no slippage and no bank settlement delays, with execution efficiency far surpassing traditional channels. Third, after the market rebounds, convert some profits into USDD to continue earning interest, achieving effective asset cycling across different market cycles.

Ultimately, the value of USDD lies not only in the safety of the assets but also in its ability to turn market volatility into holder profits through on-chain mechanisms. In an era of tightening global liquidity, this sustainable and highly flexible asset allocation approach is changing traditional investors' thinking on how to respond to interest rate hike cycles.