You can if there's a valid collateral higher than the intended loaning amount. You don't need trust if it's on the blockchain as all transaction can be verified openly. DeFi makes it easier to get this loan that would cost you more using centralized service like the user above mentioned. Exchanges like Binance offers collateral loans but since it's not advisable to trust centralized platform with your funds the need for a decentralized platform was brought into the picture which resulted to DeFi.


It's simple the borrower doesn't want to miss out on future gains of the collateralized cryptocurrency. For example, Ethereum looks very promising as a result of the upgrade launching later this year. Now I have ethereum but I'm in need of cash but can't risked selling my bags and miss future profit, I take out a loan and use my ETH as collateral. In a scenario where the price of ethereum increase it becomes a win-win situation for me as I'll still be entitled to my Collateral coin the moment I payback my loan.