I am interested in a solution what would, in a programmed, decentralized fashion, allow me to lend my bitcoin (without releasing it's custody) to a third partly, that would also be programmatically controlled, so I get, say, 1-3% "interest" on my bitcoin.
What scenario do you envision where people would pay you for you to hold you bitcoin and them not be able to use them because they don't have custody? I can't see much opportunity for something like that outside of Proof of Stake.
Potentially some kind of collateral? I think that's often done in insurance with other kinds of property. That's not risk-free though.
I am not very sure about details, but here is something about the Blockstream.