>Why don't I use my $100 directly instead? Because it's not $100 in dollars, but $100 worth of eth or something else. Borrowed dollars can be used to buy somet

>Why don't I use my $100 directly instead? Because it's not $100 in dollars, but $100 worth of eth or something else. Borrowed dollars can be used to buy something else, hoping the price of that something rises. >as a lender, for which risk are you getting paid some interest? It's theoretically possible for prices to fall fast enough so that the liquidated value of the collateral isn't enough to pay the debt. I don't think rewards are risk adjusted at all. More like same people that could provide dollars are likely to speculate on cryptocurrencies themselves, or take part in more risky and active yield generating schemes.