Got it. I don't know the solution to #2. For #1, Lava apparently offers loans against self custody BTC at a reasonable rate. If someone is ok with custodial, might as well also consider just holding some BTC ETF's and borrowing against that from a large brokerage house- their rates can range from 6%-13%.
Discussion
Yeah, I would never justify owning the ETFs just to access liquidity. I know there are bitcoin holders that will want dollar loans to buy things, but won’t want to pay in the teens for interest rates tied to liquidation risk. Where there’s demand, there’s a product. We’ll see how it shakes out