It doesn't. And if the collateral is a different asset, there is no certainty that the value of the collateral exceeds the value of the principal. So there's a risk involved and that explains the premium over the risk-free rate. It's got nothing to do with the fact that the loan is denominated in some cryptocurrency.
Proof needed. I can in fact think of counter examples:
Say there is a DAO that gives more voting power if you own more ETH. In that situation, it might make sense to borrow 900 in ETH with 1000 ETH collateral. Then you make your vote on the DAO with a power of 1900. And pay back 910 in ETH to the lender. The vote on the DAO might trigger an action that is worth more than the 10 ETH you paid in interest. For example if you run a company and the vote on the DAO was to buy a service from your company.
No, you would vote on the DAO with a power of 900, because your original 1000 ETH collateral is being held by the lending protocol
Two examples:
The DAO could support the lending protocol. Counting your assets in the lending protocol towards your voting power.
The lending protocol could support the DAO. Not allowing you to withdraw you collateral but allowing you to signal something to the DAO.