Holding a bunch of ETH in hand, you want to both preserve long-term appreciation opportunities and need liquidity for circulation—how to resolve this contradiction?

Actually, there is a way to balance both: by activating ETH through the Collateralized Debt Position (CDP) mechanism.

**The basic logic is simple**: You lock ETH into a smart contract, and the system issues an equivalent amount of stablecoins based on the collateral value. These stablecoins can be freely used—investing, emergency funds, rebalancing—whatever you need. Meanwhile, your original ETH remains in the contract, appreciating in value, effectively preserving the potential for asset appreciation while gaining cash flow flexibility. When conditions permit, you can repay the debt with interest and retrieve your ETH, completing the entire cycle.

**But risks are very real**. The most critical threat comes from liquidation. If the collateral asset price plunges to a certain critical point, the protocol will forcibly liquidate part of your position to maintain system health. Therefore, the key to this operation is risk buffering—never push the collateralization ratio to the limit; always leave a safety margin.

**How to optimize returns?** Choosing protocols with deep operations in liquidity staking and stablecoins is very important. Some well-designed DeFi platforms in the market can provide additional empowerment to collateral assets through multiple incentive mechanisms, evolving CDP from mere "lending" to "yield amplification."

In simple terms, this is a technical skill. Use your funds effectively, control leverage well, and monitor collateralization ratios regularly—by doing these, CDP transforms from "passive waiting" into a "proactive earning" tool.