You are right in that it doesn't make much sense if your collateral is made up of stable coins, but if you had something like bitcoin you may not always want to just trade it for stable coins, do whatever, and then trade back for bitcoin as the price can change. It may be better to just deposit your bitcoin onto one of these platforms (yes you start getting paid for lending bitcoin to them for as long as you keep your bitcoins there). Then you have the ability to borrow a certain amount of some other coin without having to liquidate your bitcoin.

If doing so was useless, pawnshops wouldn't exist in real life. There is value in not having to sell something and later try to rebuy it.