Only if you already had the money equivalent in the first place. Whatever you used as collateral will be something the other side would have gladly bought for the same amount. It's a speculative transaction between you and the other side that is completely unrelated to the house.

In real life, the collateral for the loan you use to buy a house is that house itself, something you did not own before (and arguably not before you are done paying back to mortgage).

This is typical of DeFi people. "Technically correct is the best kind of correct."

Your collateral would be other crypto. So it would:

- Be worth more than the house.

- Be completely virtual, so you can't use it to do anything in the real world.

- Be fairly liquid, as if it were already money.

- Be as difficult to obtain in the first place as the cash needed to buy a house without a loan. [EDIT: More difficult because of over-collateralisation!]