Why do some users still choose to borrow against enzoBTC even in a high-interest-rate environment?
After communicating with some of the borrowers, the main reason is a timing mismatch in capital flows. When a lending protocol experiences a panic-driven liquidity outflow of around 40% (far exceeding China’s 7.5% or the historical U.S. peak of ~12.5% reserve ratio), more liquidity needs to be recalled from the market, and this process is not instantaneous.
On-chain data currently shows that enzoBTC borrowers are repaying at a rate of $1–5 million per day — which is actually a very fast repayment pace.
The market generally believes that “the higher the interest rate, the faster the capital returns,” but under extreme and sudden liquidity contraction, this rule temporarily breaks down. Excessively high interest rates can instead turn originally repayable debt into bad debt. The fact is that enzoBTC borrowers’ debts are still being continuously repaid — it’s not that they refuse to repay, but that repayment has not yet been fully completed.
