At first I assumed fixed-rate protocols always leave large piles of capital earning nothing while waiting for borrowers.
Spent time with the design and noticed the opposite. Unborrowed capital does not sit idle.
It is automatically moved into floating-rate markets so it continues earning until a fixed-rate borrower appears. Liquidity providers no longer face a hard choice between locking a rate and holding dead money. The two sides stay connected without forcing that trade-off.
I keep wondering how cleanly the hand-off works when rates on the floating side shift suddenly.
Is the deeper limit in fixed-rate markets the matching problem, or simply the cost of capital that stays unused?
#termmax @TermMax
Spent time with the design and noticed the opposite. Unborrowed capital does not sit idle.
It is automatically moved into floating-rate markets so it continues earning until a fixed-rate borrower appears. Liquidity providers no longer face a hard choice between locking a rate and holding dead money. The two sides stay connected without forcing that trade-off.
I keep wondering how cleanly the hand-off works when rates on the floating side shift suddenly.
Is the deeper limit in fixed-rate markets the matching problem, or simply the cost of capital that stays unused?
#termmax @TermMax