Let's suppose that Mr. John Doe has somehow managed to accumulate 10 BTC. He holds on to them for dear life as it's his one and only savings/lifeline. He has essentially zero fiat money. Only a bank account. His coins exist on an encrypted wallet.dat, created on a dedicated computer and redundantly backed up.
John has heard of all this "defi" stuff, but doesn't understand how it works in practice. He has spent many hours reading and asking questions related to this, but has still not been able to get it all straightened out. He just gets frustrated and irritated trying to make sense of the fuzzy sales talk found on all these slick websites.
Importantly, John has no ability to do "KYC/AML", and doesn't trust centralized entities either way. John is fine with providing his full name and bank details to any entity -- the only problem is producing a "photo id", since he hasn't got one and doesn't want to ever get one again. This is important to John.
John wishes to somehow get a steady monthly "income" from his ten digital gold bars (Bitcoins, that is), most likely in the form of some sort of "interest". John is not well educated in economic terms and therefore might not be using the correct financial terms.
Is there some way that John could enter some kind of command into his Bitcoin Core which creates a "smart contract" directly on the Bitcoin blockchain which, in some manner, "locks" the coins from being spent by him, but still doesn't make him lose control of them (the private keys stay with John)? That is, so that "some other entity" in some way derives value from this so that they will send John some reasonable sum of fiat money to his bank account monthly or yearly?
And if this is possible, how exactly does that other entity derive value from this smart contract if they don't control John's coins? They are just "locked" in the sense that John cannot spend them for some pre-determined amount of time, or until both parties agree to dissolve the smart contract. (This is what I'm guessing from my understanding.)
And assuming this is possible, what amount of USD would John get per month from such a setup? Are we talking $1,000 or $100 or even $10? John doesn't think it's worth it if it's less than $1,000, which has become sort of a "Western bare-minimum monthly income" for basic survival. Even if people trust these "smart contracts", there's always the risk of a bug or glitch which would make him lose all his hard-earned satoshis. That is a nightmare scenario for John.
In fact, the "monthly allowance" doesn't necessarily have to be paid in fiat money. It can just as well be Bitcoin or really just any altcoin supported by Bisq, so that John can trade them himself to end up with fiat in the end. If that makes a difference. (Maybe there's less regulations and legal obstacles for an entity to hand out some weird coin rather than dealing with bank transfers.)
I would highly appreciate if somebody could explain what I'm missing about this, sticking to John in the situation described here.
Please do not redirect this to an existing question; I have more than likely read it and the answers already.