I kept seeing the same behavior on TermMax: users weren’t just depositing capital for passive yield—they were borrowing heavily against it. The protocol currently shows about $31.2 million in TVL and $27.28 million in active loans, meaning the value of outstanding loans is roughly 87% of the capital locked. DefiLlama
The fixed borrowing rate may explain part of this. When users know their financing cost in advance, they have less reason to close a leveraged position simply because rates elsewhere suddenly jump. One-click leverage makes that decision even easier, turning what would normally require several transactions into a much simpler trade.
Borrowers gain predictable costs, lenders receive fixed returns, and TermMax benefits when capital remains active. The protocol generated around $19,930 in fees during the past 30 days. But the same incentive has another side: lenders accepting a fixed return may miss better opportunities if wider market rates rise, while borrowers may keep leverage longer because the stable cost makes the position feel safer than it really is.
If this behavior spreads, TermMax could attract stickier borrowing demand—but it could also create a crowd of users who react slowly when collateral prices change.
When fixed rates remove the pressure to exit, are users becoming more disciplined, or simply more comfortable carrying risk?
@TermMax
#TermMax
The fixed borrowing rate may explain part of this. When users know their financing cost in advance, they have less reason to close a leveraged position simply because rates elsewhere suddenly jump. One-click leverage makes that decision even easier, turning what would normally require several transactions into a much simpler trade.
Borrowers gain predictable costs, lenders receive fixed returns, and TermMax benefits when capital remains active. The protocol generated around $19,930 in fees during the past 30 days. But the same incentive has another side: lenders accepting a fixed return may miss better opportunities if wider market rates rise, while borrowers may keep leverage longer because the stable cost makes the position feel safer than it really is.
If this behavior spreads, TermMax could attract stickier borrowing demand—but it could also create a crowd of users who react slowly when collateral prices change.
When fixed rates remove the pressure to exit, are users becoming more disciplined, or simply more comfortable carrying risk?
@TermMax
#TermMax