Is this possible? Example you lend bitcoin to something similar to like a bank and they give you interest on it? Like how now they give you 2% interest?
I heard binance is doing something similar like that but it was like 10%?
Actually Binance is doing this because they are lending that money ahead to traders at higher rates. Advantage to Binance is that margin money provided for trading is almost at zero risk because liquidation price is set in such a way that the exchange never suffers any loss. So Binance themselves are earning a huge chunk of Interest and distributing merely like 10-15%. It's possible for exchanges to do so but outside that world it's never possible because there will be a list of people wanting their money back but zero people who will willfully come back to return their loans. If they don't then the intermediary will run at a risk of getting bankrupted as they can do nothing about this.