I am trying to understand what the idea behing a site like ETHLend is.
IIUC, I can borrow coins for an interest, the same way I could borrow a traditional currency from a bank. That part is easy to understand.
But – again IIUC – they require that I block the collateral for the load – where they will only accept cryptocurrencies – upfront through the smart contract.
Translating to traditional terms, this would be as if the bank says:
Transfer 10.000 USD to us. Then we will borrow you 10.000 EUR which you can pay back in installments plus interest. After you will have paid your credit back in full, you will also get your 10.000 EUR back, otherwise we will just keep them.
What do I miss?