ELI5: Completely decentralized lending system

For a long time I have read about the debate about whether it makes sense to take risk to borrow money, using bitcoin as collateral.

What always arises is the problem of pledging your asset to a third party, because the keys have to be handed over in the process.

Now, my question is, why can't a system be created that does not depend on a third party? For example, an open code lending system that lives on a descentralized network or something similar. That allows clear rules to exist and there is no risk of a third party stealing the keys?

Sorry if the question is very stupid, I am not the brightest mind, and I humbly come to you to help me understand this, as if I were 5 years old.

Thank you so much!