Recently, I went to the bank to handle a loan, and I couldn't stop laughing at their interest rate table. This is the traditional finance routine—you have to beg and plead, provide property as collateral, and the final interest rate starts at 4% to 6%. If it's a credit loan? It’s directly heading for 10% interest.

Looking at the situation on the blockchain, it’s not that complicated. Take BNB as an example—you don't need any credit report, no manual approval. As long as you have BNB in your wallet, you can borrow stablecoins at an annualized interest rate of 0.41%. In other words, borrowing $10,000 for a year costs only $41 in interest. This cost is even less than the fees charged by traditional banks.

How big is the gap? One system relies on interest margin for profit, while the other uses code and smart contracts for efficiency—these are completely two different worlds.

The logic behind this is actually very simple. On-chain stablecoins are directly minted through collateral, so there’s no need for "depositors," and therefore no need to pay high deposit interest to attract funds. By saving on costs, the borrowing interest rate can naturally be pushed down to the floor.

Some time ago, when BNB dropped to $880, some business owners actually collateralized their BNB to borrow stablecoins, converting them into fiat to pay employees or buy supplies. The reason is straightforward—the capital cost here is almost zero, and it’s cheaper than traditional financing by a wide margin.

This is what true blockchain innovation looks like. Don’t just focus on the ups and downs of the K-line chart; understanding this revolution in capital efficiency is the real key to grasping the value of the entire DeFi market.