If you have to pledge enough collateral to cover the entirety of the principal, your net investment position is either zero or positive. In other words, you're not borrowing anything.
If doing so was useless, pawnshops wouldn't exist in real life. There is value in not having to sell something and later try to rebuy it.
Borrowing and lending is the primary and most important function of finance. It allows economic agents to trade future consumption for present consumption. Yet it is fundamentally impossible using blockchain technology.
a) expected to appreciate in value b) yield-bearing itself
and you don't want to sell it.