no one wants to lock up $1 of capital to extract $ 0.10 of profit in a year,
That is an incredible inflation adjusted return. You need to lock up capital (sacrifice liquidity) to reduce counterparty risk to zero. Otherwise your bet isn’t worth the value on the tin, as any rational trading partner must also consider counterparty risk discounting (which tends—not coincidentally—to be similar to inflation-free interest rates). This comes up all the time in crypto mechanism design, and in general it’s part of the reason why ethereum has permanent inflation (as you may need a permanent income stream to pay stakers who are sacrificing liquidity for the positive externality of securing the network).
That is an incredible inflation adjusted return. You need to lock up capital (sacrifice liquidity) to reduce counterparty risk to zero. Otherwise your bet isn’t worth the value on the tin, as any rational trading partner must also consider counterparty risk discounting (which tends—not coincidentally—to be similar to inflation-free interest rates). This comes up all the time in crypto mechanism design, and in general it’s part of the reason why ethereum has permanent inflation (as you may need a permanent income stream to pay stakers who are sacrificing liquidity for the positive externality of securing the network).