Imagine you are holding a piece of gold in your hand. Traditional banks operate in a straightforward and rough manner—directly locking it in a vault, issuing you a certificate, and letting you go to the counter periodically to collect a tiny interest like mosquito meat. But Web3's decentralized lending protocols play a completely different game. Taking a leading lending protocol as an example, it equips your gold with a turbocharger, allowing this asset to maintain liquidity while generating multi-layered returns.

Looking back from the year 2026, the competition between traditional finance and DeFi is no longer about who is more efficient. Frankly speaking, it’s a competition between two different dimensions.

How do banks think about mortgages? Very straightforward—once your house or stocks are frozen as collateral, they turn from profit-generating machines into dead assets. But in the ecosystem of a leading DeFi protocol, the situation is completely reversed. For example, through the components clisBNB and slisBNB, BNB holders can play around: your BNB continues to participate in on-chain validation to earn staking rewards, while also generating lisUSD, a stablecoin. Holding this stablecoin allows you to continue arbitrage in liquidity mining. This operational process activates the same capital multiple times, and compared to the traditional banking business model that relies on interest rate spreads, the difference is like heaven and earth.

From a technical perspective, the strength of these protocols lies in smart contracts. Automated liquidation mechanisms and real-time risk management systems make the entire lending process transparent and reliable, completely eliminating the need for manual approval or old-fashioned credit scoring methods.