In lending, the market presents two immutable rules. The tighter the funds, the harder it is to generate returns; the larger the protocol's size, the lower the costs—seems contradictory, but actually not.

A leading DeFi protocol has taken these two rules to new heights. Its TVL once surged to $4.3 billion, ranking first in the BNB Chain lending sector, forcibly driving down borrowing rates to 1%. What does this mean? It indicates that interest rate arbitrage has shifted from speculation to a form of guaranteed income.

How is this achieved? Let's break it down into three levels.

On the technical side, the foundation is solid—over-collateralization combined with a grid management system of liquidation bots keeps the bad debt rate at 0.12%, a figure far below Aave's 0.9%. Risk control isn't empty talk; it's backed by real data.

On the funding side, the protocol leverages ecosystem advantages. Blue-chip assets like BNB, slisBNB, BTCB continuously flow in. Even with a utilization rate of 85%, the protocol can still maintain low interest rates—this is the power of scale. Small protocols don't even stand a chance.

Incentive strategies are also carefully designed—token rewards are fully directed toward depositors, while borrowers receive almost no subsidies. Although this approach may seem unfriendly, it actually ensures the authenticity of interest rates, preventing them from becoming bubbles driven by mining debt.

Looking at the other end, Binance USD1 Earn can yield 20% annualized, a stablecoin pool on a certain DEX maintains around 8%, and Solv's USD1 product offers about 10%. All these yields surpass the 1% to 2% borrowing costs. The interest rate spread is there, not for short-term speculation, but as a long-term structural opportunity.

In simple terms, the $4.3 billion TVL is a moat, and the 1% interest rate is the pass to enter that moat. The 20% arbitrage space won't disappear out of thin air; the earlier you participate, the lower your costs.