In crypto asset management, how to generate more returns from the assets you hold is a question every holder is contemplating. The recently popular LSDFi project provides an interesting answer through an innovative mechanism—using interest-bearing tokens as collateral, borrowing stablecoins, and achieving multi-layered yield stacking.

The core logic of such projects is actually not complicated: mainstream assets like BTCB, ETH, BNB, etc., are constantly appreciating in value. If you can also generate additional income from them, isn’t that a win-win? Furthermore, if these assets themselves have interest-bearing properties (such as PT-USDe, asUSDF), the situation becomes even more intriguing.

So, how does it work specifically? First, deposit these interest-bearing tokens into the protocol’s vault as collateral. The key point is—you won’t lose the original interest income, and you can also borrow low-interest stablecoins. The interest rate level here is very important: currently, the borrowing interest rate for such projects in the market is stable around 1%, which has a clear advantage compared to traditional lending markets with costs exceeding 10%.

After obtaining stablecoins, the second step is to transfer them into mainstream financial products. These products generally offer annualized returns of about 20%. Although it sounds high, the risk is actually very low—mainly stable appreciation.

Let’s do a simple calculation: suppose you collateralize interest-bearing tokens worth $10,000. First, you retain the interest income from these tokens themselves (a few percentage points per year). Second, the stablecoins you borrow cost only 1%. Third, you use these stablecoins to invest in financial products that yield about 20% annually. The three-layered returns combined significantly improve capital efficiency.

Of course, this kind of operation involves multiple protocol interactions and requires understanding the risks at each step—price fluctuations of collateral, interest rate changes, smart contract risks, etc. But from a purely yield-structure perspective, this is indeed a way to make existing assets operate more efficiently in the current market environment. For users holding blue-chip assets who want to fully explore their earning potential, this approach is definitely worth understanding.