The Federal Reserve's rate cut expectations are heating up, and market rumors suggest that aggressive actions may be taken in the near future. Some researchers propose that by 2026, a cumulative rate cut of 150 basis points will be needed to stimulate employment, and there are even voices suggesting to refer to Japan's negative interest rate model. But the reality is: from theory to implementation, there is still a long way to go.

Many people have unrealistic expectations for DeFi, thinking they can achieve so-called "negative interest rate borrowing" through certain protocols. The idea sounds great: borrowing money can also earn returns. But the on-chain world doesn't work that way.

Take Lista DAO as an example. Its lending interest rate model is entirely determined dynamically on-chain—whoever has tighter supply and demand sets the price trend. No matter how much the Federal Reserve cuts rates, it can't change this logic. Once the entire network of users floods in, wildly collateralizing loans, the capital utilization rate instantly hits the maximum, and the algorithm reacts immediately: APY jumps directly from a modest 1% to 10%, or even more absurd numbers.

This is the power of code—it only listens to supply and demand, not policies. That's also why understanding the essence of on-chain lending mechanisms is much more useful than following macro policy predictions.