Untrusted collateral? I will send paypal before i get the loan.
Collateral can be anything that has some value but must be greater than repayment amount. Physical goods are best for collateral but here shipment of these goods makes it impossible to use them as collateral, that is why we love to have digital goods as collateral.
Collateral --> 1) Physical Collateral --> Gold, Silver, Collectibles, Car, Bike, anything that has some value.
2) Digital Collateral --> Coins, Tokens, Accounts, Gift cards etc anything that can be sold Instantly in case of loan default.
Depends on lender whether he want to take it as collateral or not after analyzing risk involved with particular asset.
PayPal can't be sold in case of loan default, that is why it can't be consider as valid collateral.
Hope you are able to understand what I'm trying to say, and look for an alternative to get funded or provide something that can be sold.