Seeing many people equate USD1 with USDT, USDC, and other stablecoins, thinking that since they are all pegged to 1 USD, it doesn't matter which one to use, and even switching between them for higher borrowing limits. Honestly, this kind of lazy thinking can lead to losses in DeFi.

At first glance, USD1 is backed by RWA assets like US Treasuries, which indeed adds credibility. But that doesn't mean it can replace established stablecoins in all scenarios. The most realistic issue is that USD1's liquidity depth may not yet match that of USDT. When you need large exchanges or cross-chain operations, insufficient liquidity pools can easily cause slippage, and the losses might be greater than expected.

My own usage is like this: in the Lista ecosystem's lending segment, USD1 works well as collateral or when participating in specific mining pools. But for frequent on-chain payments, exchanges, deposits, and withdrawals, I still prefer more widely circulated stablecoins. Because different ecosystems have different optimal solutions.

The key is to understand that each token has its own area of expertise. Don't expect one tool to handle everything; instead, using the wrong tool in the wrong place is more likely.