[nahollander]

This happens quite regularly in the world of margin trading.

Imagine the following:

1. I own ETH, and want to hold my ETH position so I can enjoy price increases, but I need liquidity to live my day to day life and, well, it's hard to pay for things with ETH. 2. Instead of selling ETH and exiting my position, I put ETH up for collateral and borrow a stable-coin (like DAI) against it. That way, I maintain my price exposure to ETH, but have liquid cash to use for my day-to-day needs.

[TekMol]

Oh! So this is not about lending buying power. But about lending in the context of betting on currencies.

A lends 10 Xcoins to B. B puts 11 Ycoins into escrow. A will either get back 11 Xcoins or 11 Ycoins.

If Xcoins rise in price relative to Ycoins, B is happy and A is sad.

If Xcoins fall in price relative to Ycoins, B is sad and A is happy.

[matte_black]

And if you don’t use coins for day to day living expenses?

[cortesoft]

You could cash out the borrowed coins for cash.