The phrase that keeps pulling at me on #TermMax is "predictable returns." FT is described as a zero coupon bond. Buy at a discount, hold to maturity, redeem one for one. Clean instrument.
@TermMax
Then I read the liquidation and physical delivery page and the shape of it changes.
There is a two hour window after maturity where liquidators can clear unpaid loans. If anything is still unpaid or only partly liquidated when that window closes, physical delivery begins automatically. The docs then say FT holders redeeming through the pool receive a proportional distribution of underlying and collateral tokens based on their FT shares.
So the fixed claim never fails loudly. It converts. A promise of a specific number of stablecoins becomes a slice of whatever was sitting behind the loans that did not close.
The risks page does not hide this. It states that liquidated asset value may not fully cover principal plus interest, and that physical delivery may result in receiving assets different from those initially deposited. Worth sitting with what a lot of TermMax collateral actually is. Pendle PT tokens dominate the Ethereum markets. Assets carrying their own maturities and their own liquidity conditions. A pro rata slice of that basket behaves like inventory rather than a coupon. You did not pick it, and the exit price is whatever someone is willing to quote that week. None of this is buried. It sits in the documentation for anyone who scrolls far enough. The part I keep turning over is the distance between where the risk lives in the docs and where it lives in the pitch.
Which leaves something the documentation does not answer. When the delivered collateral is itself a dated PT token that has already passed its own expiry, what is that slice actually worth, and who is standing on the other side of the bid?
@TermMax
Then I read the liquidation and physical delivery page and the shape of it changes.
There is a two hour window after maturity where liquidators can clear unpaid loans. If anything is still unpaid or only partly liquidated when that window closes, physical delivery begins automatically. The docs then say FT holders redeeming through the pool receive a proportional distribution of underlying and collateral tokens based on their FT shares.
So the fixed claim never fails loudly. It converts. A promise of a specific number of stablecoins becomes a slice of whatever was sitting behind the loans that did not close.
The risks page does not hide this. It states that liquidated asset value may not fully cover principal plus interest, and that physical delivery may result in receiving assets different from those initially deposited. Worth sitting with what a lot of TermMax collateral actually is. Pendle PT tokens dominate the Ethereum markets. Assets carrying their own maturities and their own liquidity conditions. A pro rata slice of that basket behaves like inventory rather than a coupon. You did not pick it, and the exit price is whatever someone is willing to quote that week. None of this is buried. It sits in the documentation for anyone who scrolls far enough. The part I keep turning over is the distance between where the risk lives in the docs and where it lives in the pitch.
Which leaves something the documentation does not answer. When the delivered collateral is itself a dated PT token that has already passed its own expiry, what is that slice actually worth, and who is standing on the other side of the bid?
