stUSDS 23.59% APR, a classic case study of lending and withdrawal pressure. Recommended for newcomers to read and understand: 1/ First, the high interest rate has been sustained for a while. This is due to the lending pool being drained, causing the interest rate curve to rise. At this point, depositors may earn high interest, but withdrawing funds becomes extremely difficult. Normally, this design forces borrowers to repay in a high-interest environment, which replenishes the pool and allows depositors to withdraw. 2/ In this situation, it’s essentially a bank run. If the collateral has issues—like some synthetic stablecoins that were already at a loss internally—borrowers won’t repay because the borrowed amount might already exceed the value of the collateral. But if the collateral is healthy, then it’s just a supply and demand balance issue. 3/ Sky proposed an optimization plan with three main points: (1) Incentivize the deployment of a stUSDS-USDS Curve Pool, so depositors can exit at a discount even if they can’t withdraw directly. (2) Establish a lending market using stUSDS as collateral. (3) Lower the liquidation LTV from 145% to 120%. Deploying the Curve Pool is the smartest move and the most effective in the short term. Those eager to withdraw can exit via the secondary market, while those confident in stUSDS can buy in at a discount. Establishing a lending market with stUSDS as collateral adds another layer of complexity. It has limited impact on easing withdrawal pressure but could further increase demand for stUSDS. Lowering the LTV threshold leans more in favor of borrowers. The official intention is to give borrowers more room and time to repay, but it doesn’t provide substantial benefits to depositors and increases risk. Currently, the fund utilization rate in the pool is still at 98%-100%. Theoretically, the Curve Pool launch will provide some relief. For now, this situation isn’t recommended for newcomers to get involved—just sharing an analysis. If you’re familiar enough with USDS, there might be some opportunities here.