And cryptocurrency is usually used for illegal stuff, so it is not necessarily desirable.
How I can take out a collateralized loan, anywhere in the world, without having to ask for approval?
On the person 'supplying trust & owned property and getting a stablecoin loan', the other side of some Dai loans, there is real value being created there as they can use cheaper credit to invest in their business.
Most of the value goes to people in places like Argentina & Nigeria facing massive inflation who are now able to hold an asset that is backed to the dollar and overcollaterized by crypto, western bonds, & real properties held in the West, which is a better option than pretty much anything they can get in their home country.
What you do with the borrowed funds is up to you and there are an endless stream of possibilities. One example is to re-lend out again for additional interest. Interest arbitrage is a way to make your existing capital, work for you.
Lend BTC +1%, Borrow ETH -3%, Stake ETH +5%. 2% profit on the ETH and 1% on the BTC. Of course, you could then sell the profits for say, USDC, which you can then lend out again (~4%) or use to pay your bills or drug habit or whatever...
At the end of the day, this is what banks do with your funds. But instead of giving them the vast majority of the interest, why not take the interest yourself?
Larger picture, I personally see this as the opposite of credit cards, which are a blight on society [0]. People go into debt that they may or may not be able to pay off in the future. Why not reverse that and teach people to not spend more than they can pay off (collateralized loans)? You're punished with liquidations instead of stupid high interest rates.
[0] https://www.cnet.com/personal-finance/credit-cards/americans...
