An over collateralised loan can be withdrawn and an under collateralised loan can only be used for margin trading.
Ex1. If you put $100 as collateral in Dai, you can get a loan of $60 in say ETH. You can withdraw this loan and if you don’t repay, you lose your collateral.
That depends on the bank. Maybe the bank can’t afford to make the loan interest free completely. Maybe overtime they will reduce it. There would be many other ways to monitise the obvious ones to me are payments and by providing banking as a platform to others for a fee.
Thanks Aneeq. Agree with your point totally. In the new structure, as I pointed out in the article, there is no interest and hence whatever bank is paying as interest is now shown under profits and dividends from these profits would be shared with the depositors. This means that if the bank policy is to reduce interest or remove interest and enable…