If you're holding $USDf, now's the time to pay attention.

Got hit hard from a $USDf looping strategy—even with what I thought was good sizing.

This post is my framework for evaluating long-tail stablecoins going forward.

Hopefully, it helps others avoid the same fate.

1. Transparency & Collateral Quality
Avoid any project that doesn’t clearly disclose its collateral base. Especially if the collateral is off-chain or unclear. If it's not easy to verify, it's probably not worth the risk.

What happened here? Rumors began swirling about poor-quality collateral, and on-chain activity suggested liquidity was evaporating. That uncertainty triggered a cascade.

2. Understand the Yield Source
If the protocol offers 10%+ APY, ask where is that coming from?
Yield without a sustainable revenue stream is a ticking time bomb, not an opportunity.

3. Redemption Mechanism
Native 1:1 redemption is critical. If you can’t swap the stablecoin back for real assets directly, you're relying on secondary markets, often the first to dry up in a crisis.

4. Secondary Market Liquidity
Always check liquidity on DEXs. If the stablecoin isn’t paired deeply with USDC or USDT, you’re exposed. In panic moments, unbalanced LP pair can mean forced liquidation in leveraged loops.

5. PT-Looping Amplifies Risk

I underestimated how fast this snowballs. Don't make the same mistake.

6. Don’t Chase APY Blindly
High yield is tempting, especially in a quiet market but it often comes with hidden leverage or systemic risk. Don’t let numbers blind you from the fragility underneath.

7. Diversify
This loss hurts, but it wasn’t my whole portfolio. If you’re putting all your stablecoin strategy into one experimental coin, you’re gambling whether you admit it or not.

If you're still in, monitor the peg and the project’s ability to defend it. Exit plans matter more than entry points.

Stay safe.