Borrowing against your BTC sounds risky to me

I keep seeing people talk about using their Bitcoin as collateral to borrow cash instead of selling it, and I understand the idea in theory. You keep exposure to BTC, avoid selling, and get fiat liquidity.

But I still don’t understand how this works safely in real life.

If a lender gives you money against your BTC, they need some way to recover the collateral if you default. And the only way they can really do that is if they control the coins, either through custody, a smart contract, or some kind of multisig setup.

But once someone else has control, isn’t that already the risk? If the platform freezes withdrawals, gets hacked, goes bankrupt, changes terms, or acts shady, you could lose your Bitcoin even if you did nothing wrong.

That feels like the opposite of the whole point of Bitcoin. Not your keys, not your coins.

Is there actually a way to borrow against BTC where you still keep control of your coins?