Not necessarily. I think a great example of something that smart contracts enable in a lending scheme is built-in secondary market functionality. A lot of marketplace lending platforms have built in proprietary secondary markets, but none of them are anywhere near as liquid as crypto markets are in general, and the vast majority are not interoperable, to my knowledge.

Your ownership in a loan on Dharma is denominated by a cryptographic token like Bitcoin, Ether, or any other, meaning its just as easy to trade your stake in a loan as it is to trade a cryptocurrency.

Assets built on open protocols are fundamentally easier to build products and technologies around -- insofar as they lower the barrier to entry for developing financial applications, their openness is extremely valuable.