It is completely incorrect to say that Defi only supports overcollateralized lending.

You can, in theory, borrow $1m against $100k collateral. How? The kicker is that you can't withdraw the coins and walk away - instead you tell the lending protocol to use them on your behalf.

For example, you can tell a protocol to buy or sell them to create a specific-price exposure, to deposit them in a specific AMM pool, etc. This is how margin trading on exchanges has worked for decades!

And it's going to usher in the next stage of evolution in lending protocols.

Maker/Aave/etc. will let you borrow and withdraw $50k Dai vs $100k ETH, but they will let you borrow and *use* $500k Dai vs $100k ETH, as long as it controls what you spend it for and can liquidate you any time.

No identity and no trust required.