Yesterday, $USD1 's interest rate on Dolomite skyrocketed to 35%, shocking many people. After liquidity was replenished today, it fell back to around 16%.

This situation is not unfamiliar; essentially, it's a case of borrowing demand suddenly surging, pushing interest rates higher, and then funds coming in afterward causing rates to naturally decline.
In fact, the USD1 deposit activity has been ongoing for quite some time, continuously renewed, with various collaborations with CEXs and DEXs to expand the USD1 market. During this tough market, everyone has been holding on for a long time.
In theory, USD1 itself shouldn't have major issues. This high yield can be earned, but it shouldn't be taken for granted as a given. Ultimately, it depends on two things: how much supply there is and whether the borrowings can be sustained. If the lending side becomes unbalanced, interest rates will spike, and risks will rise accordingly. When high yields appear, always keep an eye on supply and borrowings, and withdraw immediately if the market sentiment shifts.
The stablecoin market will grow larger in the future, but in the current market, very few stablecoin deposits offer such high interest rates. Everyone should cherish and make the most of it.