Hi Chandan,

This is a good observation, and it’s why the home equity loan example isn’t perfect for the current implementation of the system. But, imagine a world where the deed to your house is contained in a cryptographic token and there’s an established marketplace for houses just like yours — now you can live in your house and still autonomously borrow Dai against it! Also, I think the word “enjoy” means different things for different assets. Am I not “enjoying” my money when I lock it into a 3-month CD? When Ethereum switches from PoW to PoS, there will most likely be tokens that are backed by locked-up ether, effectively creating interest-bearing ETH. Now, when I lock this token into a CDP, I’ll be earning interest *and* have liquidity via the Dai loan.

Regarding BTC/ETH becoming stable enough to be used as a medium of exchange — not a chance. Even if they do become *more* stable, dynamic supply currencies will always be better at this feature than fixed supply currencies.