If the V-UTXO is about to expire, the ASP will get their liquidity back soon; if they're borrowing liquidity they don't need to borrow it for very long.
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This is its Achilles heel. The constant churning and txn from pool to pool is going to be a turnoff
I get it, but the user will have to pay when opening that VTXO, so it's always that 0.23%, no?
Nope.
Think of it this way: the ASP is loaning you money. But when they get the money back is not at the end of the next V-UTXO expiry: it's when the current V-UTXO expires.