CAn you see: I am less risky to loan to on base layer because i will accept 8% for a full 365 day lock. you are much higher risk to loan to as you wont accept anything but 20% for a 3 day lock. of course the chain will loan to me over you every single day with that deal.

An 8% yield on a 12 month lock is more risky than a 7% yield on a 3 day lock.
The 12 month lock prints more inflation.
The timelock means nothing.
It is nothing but an encumbrance to both the network and the user at the same time.

Loans are used to build value.
Hive will do nothing with the money it's borrowing from the user.
It's dead money and dead weight.
Adding a timelock just creates the illusion of sustainability.
One year goes by and we are in an even worse situation than before because it will take at least a year to wind it down if it fails.

I did a deep dive on the Eurodollar system today.
You should read it.
You will not be pleased.