Holding a bunch of coins but unable to use them flexibly? This issue has been troubling coin holders. Recently, there is an idea worth considering: lock assets in a vault and mint a synthetic stablecoin supported by over-collateralization, which retains the appreciation potential of the original coins while also providing on-chain liquidity.

How exactly does it work? After your token enters the vault as collateral, the system mints stablecoins for you in proportion. These stablecoins can be used directly for trading, lending, or other DeFi operations. The key is that your original token is still there, so if the market takes off, you can still enjoy the gains—while these tokens are still supporting the value of the stablecoin.

This design of over-collateralization is indeed relatively secure, allowing asset activities while locking in risks. The problem is that different products have significant differences in supported coins and parameters, so finding a suitable solution requires doing more research.