Defi loans are not actually useful though. You overcollateralize 150% of your ETH or whatever, to get say 100% back in some stablecoin. But you could have just

Defi loans are not actually useful though. You overcollateralize 150% of your ETH or whatever, to get say 100% back in some stablecoin. But you could have just sold the ETH in the first place...? If it truly is a "currency" then why are you taking a currency loan on your currency? That's like putting up $150 of collateral to get a $100 loan, it makes no sense. Unless it's not a currency, in which case this is just a margin loan - I think my speculative asset is going to go up in price, so I will take out a loan against it instead of selling it. Which has only two use cases: I need the dollars and I'm avoiding paying capital gains, OR I want this margin loan to speculate on more cryptocurrency! That's a pretty small use case compared to like, "loans" in general. Plus if/when the ETH/USD price crashes, all of these loans will get liquidated and push the price down further. I fully expect a "portfolio insurance"-Black Monday type crash if ETH ever falls by more than 30%.