I was reading through TermMax’s leverage docs when I came across their example with Alice.
And I had to smile because Alice is actually my name too 😂
But the example itself made me want to check the numbers instead of just reading through it.
Alice starts with 1,000 USDC and takes a 2,000 USDC flash loan.
So she has:
1,000 + 2,000 = 3,000 USDC
With ETH at $1,000, that buys:
3 ETH
So her initial $1,000 gives her 3× exposure to ETH.
Pretty straightforward.
What I found more interesting was what happens after that.
The flash loan gets repaid within the same transaction, but the leveraged position stays in the GT.
TermMax’s example ends with:
3 ETH collateral
2,100 USDC debt
So:
$2,100 / $3,000 = 70% LTV
And this is where I started looking at the example differently.
The flash loan makes the process look very clean because everything happens in one transaction.
But the risk doesn’t disappear when the flash loan is repaid.
You’re still left with 3 ETH backing 2,100 USDC of debt.
So for me, the interesting question isn’t really how easily TermMax creates the leverage.
It’s what happens to that position after the one-click leverage is done.
What happens if ETH drops 10% right after that position is created — how much room is actually left before liquidation?
#termmax @TermMax
And I had to smile because Alice is actually my name too 😂
But the example itself made me want to check the numbers instead of just reading through it.
Alice starts with 1,000 USDC and takes a 2,000 USDC flash loan.
So she has:
1,000 + 2,000 = 3,000 USDC
With ETH at $1,000, that buys:
3 ETH
So her initial $1,000 gives her 3× exposure to ETH.
Pretty straightforward.
What I found more interesting was what happens after that.
The flash loan gets repaid within the same transaction, but the leveraged position stays in the GT.
TermMax’s example ends with:
3 ETH collateral
2,100 USDC debt
So:
$2,100 / $3,000 = 70% LTV
And this is where I started looking at the example differently.
The flash loan makes the process look very clean because everything happens in one transaction.
But the risk doesn’t disappear when the flash loan is repaid.
You’re still left with 3 ETH backing 2,100 USDC of debt.
So for me, the interesting question isn’t really how easily TermMax creates the leverage.
It’s what happens to that position after the one-click leverage is done.
What happens if ETH drops 10% right after that position is created — how much room is actually left before liquidation?
#termmax @TermMax