In order to borrow, you have to open a collateral debt position in underlying protocol.
I have a question :
Since that you already have the funds, why would you still want to borrow by locking up an even more amount of money into the protocol [ Assuming the collateralization ratio is 150%]. It makes more sense in the future if it is an under-collateralized position though.
If the entity wanted to borrow the funds to go long / short an instrument, why not just use the collateral he / she put up instead ?
In the example of offering a house as a collateral in order to borrow from the bank, at least, the entity will have a place to live in. Same goes for buying a car and putting the car as a collateral … etc.