In the web3 space, I don't understand why people `borrow`. 
In my experience using some of these platform. You have to provide 200% collateral on one currency to borrow another. And if you cannot repay, you risk forfeiture. 

In physical world, the reason you have collateral is you still own it. Imagine selling you stock or car to purchase something. You can not simply buy it back. But in crypto, isn't it better to just convert your 500k USDC to WETH and than borrow 500K WETH while locking 1M USDC as collateral. 

What am I missing here?

@blockbot Steward. Frames Builder. Pro Chess-er ♟️


The example you used is what people do in a bearish market, you supply a stablecoin, then borrow some other coin which you're bearish on and sell it, at last they rebuy the sold asset for a less dollar value and repay their debt, I think it's better to explain with an example: say you supply 1000 USDC, then borrow like 50% of it as ETH which is approximately 0.2 and sell it for 500 USDC, after a while that the market has been bearish you need to buy and repay the 0.2 ETH which is worth less than the initial 500 USDC (let's say it's down like 30% and you need to pay 340 USDC for 0.2 ETH), after repaying and withdrawing you end up with 1160 USDC (16% profit) in a bearish market