Many people have experienced this dilemma: optimistic about the long-term prospects of an asset, but suddenly needing cash. Sell it, and watch the subsequent gains be eaten up by others. Hold on, and you're stuck in a passive waiting game. Is there a way to have both?

This is exactly the problem that some emerging DeFi protocols aim to solve. They offer a third option: preserve your exposure to the asset while generating stablecoins on-chain, allowing you to access funds without selling the asset itself.

The operational logic is actually simple. You deposit approved collateral—cryptocurrencies, stablecoins, or tokenized real-world assets—into a vault. The system then allows you to mint stablecoins based on these collateral assets. This way, you retain the potential for growth of your original position while gaining flexible, usable liquidity.

For holders, the key appeal lies in flexibility. No matter how the market fluctuates, your core position remains intact. When you need cash, you can directly use the minted stablecoins instead of being forced to sell at a low price. Especially in uncertain market conditions, this mechanism can effectively alleviate the psychological pressure of passive selling.