In margin trading, stablecoins like USDT serve as secure collateral to avoid liquidation risks. Traders can open leveraged positions on BTC or ETH while using stablecoins as margin, ensuring that even if the market crashes, the collateral’s value remains stable. For example, a trader with $10,000 in USDT can use 5x leverage to trade $50,000 worth of BTC, with the stablecoin collateral acting as a buffer against sudden price drops. This strategy balances leverage with risk management, as stablecoins prevent margin calls caused by volatile collateral.