That's not true, you can definitely do this with a smart contract blockchain like Ethereum, and there are plenty of loan protocols already that do this in produ

That's not true, you can definitely do this with a smart contract blockchain like Ethereum, and there are plenty of loan protocols already that do this in production with $ billions in assets transacted. No one can steal your ETH from your wallet, but they can liquidate your staked collateral held by the smart contract.