Want to earn returns just by holding your money? The strategy of earning interest tokens combined with collateralized lending is definitely worth a look.

Assets like USDe, PT-USDe, and asUSDF inherently have interest-earning properties, so holding them directly can generate basic annual yields. But if you understand how to stack lending and financial management, your returns can double.

Take USDe as an example. Holding it itself yields an annualized return of 12%, which doesn’t disappear just because of collateralization. The key is the lending operation after collateralization—borrowing USD1 stablecoins at a 70% collateral ratio, with a 1% interest rate cost, which is quite low. The borrowed USD1 is then invested into a financial product with a 20% annualized return, which is the main source of profit.

Let’s do the math: $100,000 worth of USDe, with a 70% collateral ratio, can borrow $70,000. USDe generates $1,200 in interest annually, and the USD1 financial product yields $1,400, minus $700 in borrowing interest costs, for a net profit of about $2,530. The annualized return can reach 23%. The volatility risk is extremely low, and liquidation risk is within a manageable range. That’s why experienced players are operating this way.