Synthetic stablecoin blow-up isn’t the fault of modular lending protocols. It’s just that veteran DeFi players in this cycle are super cautious about high returns tied to synthetic stablecoins (like UST’s 20%), but still can’t resist high returns tied to USDC/USDT. So, project teams catered to this preference, switched up the script, minted cost-free synthetic stablecoins, and used modular lending protocols to create high USDC/USDT-based yields—tricking another wave of DeFi miners. In the last cycle, most synthetic stablecoins had on-chain underlying assets, returns were verifiable, and the cost of malicious behavior was high. But in this cycle, it’s basically all moved off-chain (so-called deCeFi), with no audits, no asset verification, and sky-high returns promised. Modular lending protocols are the biggest DeFi innovation of this cycle. If we compare it to the e-commerce era of Taobao, we’re currently in the counterfeit currency rampant phase—it’ll take time to evolve.