I have been looking into Wrapped Bitcoin and liquidity pools and earning interest but seem to be getting lost in circles trying to find the right answers, perhaps there isn't a way to do it now whilst still maintaining your bitcoin on your ledger or trezor or whilst maintaining your private keys?
There is no way to lend bitcoins in a fully trustless or decentralized way.
Wrapped bitcoins carry custodial risk -- WBTC is backed by bitcoins held in BitGo's custody.
The yields for WBTC lending are quite low too, much lower than BTC lending rates on BlockFi or Nexo.