Recently, many people have been investing in the USD1 stablecoin financial products, with annualized returns reaching 20%, which sounds quite tempting. But there's a lot of complexity behind it, so I’ve organized my observations.

First, let's talk about the product itself. This USD1 financial activity is about to end, with the deadline this Saturday morning. From the price trend, the official has been gradually repurchasing the stablecoins to stabilize the price. Whether there will be new replenishment activities later is uncertain. But overall, it’s clear that the official is seriously promoting this stablecoin ecosystem.

A noteworthy background is that last month, the WLFI project team proposed a plan to use 5% of the treasury tokens to promote USD1 ecosystem cooperation—essentially using USD1 to mine WLFI. Although there are significant internal disagreements and the proposal hasn't been approved yet, just the 5% allocation is worth about $100 million. If the proposal passes, USD1 could immediately regain strength, and combined with phased incentive mechanisms, this financial activity could be participated in long-term.

The key issue is the exchange rate game. Many people haven't figured out this calculation:

The daily profit is roughly equivalent to a 0.00055 decrease in the exchange rate. If you hold for 30 days, the total exchange rate difference consumed is about 0.0163. In other words, if you buy USD1 at a price of 1.0020, your break-even line is approximately 0.9855—below this price, you start to lose money.

During the financial period, five major factors could influence whether people redeem early:

1. When the market improves, the market rallies, and funds will be pulled out to go long;
2. If other higher-yielding financial activities appear;
3. Activities like pre-TGE, which require large amounts of capital;
4. Negative news about USD1;
5. Some people might exit in the last few days to buy the dip and take advantage of the exchange rate difference.

Another potential factor that could push up the exchange rate is continued support from the official or project team. But in reality, in the first few days of the activity, a significant amount of USD1 supply was added, which will likely create selling pressure later on. Small deviations from the peg are unavoidable, and this exchange rate loss isn’t insignificant. Some people have already started calculating the price change curve of expected returns, and I estimate that quite a few will run in the last three days.

I’ve also accumulated some USD1, but after learning from past "aggressive operations," my current strategy is to stay on the sidelines and observe. I plan to finish the activity, then wait a few more days for the price to re-anchor before taking action. After all, there are too many variables and gameplays involved, and everyone’s approach will definitely differ.