A different way to think about liquidation
One thing I find interesting about @TermMax is how it approaches liquidation.
Usually, liquidation means selling the collateral on the market when a position becomes unsafe. But that can get tricky when liquidity is low or the market is moving fast.
TermMax has another option: physical delivery. In some cases, instead of selling the collateral, it can be delivered directly to the lender as compensation.
I think this makes a lot of sense for assets that aren’t easy to sell quickly.
It’s a simple idea, but an interesting one as DeFi starts supporting more diverse collateral, including RWAs and lower-liquidity assets.
Definitely one of the less talked-about parts of #TermMax that I’m keeping an eye on.
One thing I find interesting about @TermMax is how it approaches liquidation.
Usually, liquidation means selling the collateral on the market when a position becomes unsafe. But that can get tricky when liquidity is low or the market is moving fast.
TermMax has another option: physical delivery. In some cases, instead of selling the collateral, it can be delivered directly to the lender as compensation.
I think this makes a lot of sense for assets that aren’t easy to sell quickly.
It’s a simple idea, but an interesting one as DeFi starts supporting more diverse collateral, including RWAs and lower-liquidity assets.
Definitely one of the less talked-about parts of #TermMax that I’m keeping an eye on.