After spending a long time in the crypto world, some things are well understood by everyone. Every time the market rises, people say liquidity is sufficient, but when it comes to actually using money, they get confused—either forced to sell coins at a loss, watching them continue to rise, or locking coins into lending protocols as collateral, constantly worried that a price fluctuation will trigger liquidation and wipe everything out. This kind of stagnation is especially frustrating, feeling like fighting against your own assets.

Speaking of which, the new generation of DeFi lending protocols has actually targeted this issue. They propose a seemingly simple but game-changing idea: collateral should not be frozen sacrifices, but active, circulating assets within the system that can be reused without being depleted. It sounds obvious, but looking at the past DeFi ecosystem makes it clear—those protocols usually only accept low-volatility, transparent crypto assets. Real-world assets, yield-bearing tokens, or derivatives are either rejected outright or forcibly labeled, changing their original nature.

The real change lies in thinking from a different perspective: instead of worrying about which assets are safe enough, it’s better to study how to model various forms of value and risk pricing, then integrate them into a unified risk engine. The stablecoins issued by such protocols are not just simple money printing, but reflect real-time learning of complex financial realities on-chain.

Over-collateralization is not a new trick, but once the collateral pool expands beyond crypto assets—for example, tokenized government bonds, real estate income tools—the entire model is revolutionized. The system no longer needs to handle single-dimensional market fluctuations but must manage multi-dimensional risk pricing.