When i Analysis the @TermMax doc I found the main fact - why the liquidity important for TermMax's fixed-rate market?
explain in short here in my content with including example ✅✅

Step 1 — What was the Orderbook/Auction model like?
Initially, a fixed-rate market can be thought of much like an orderbook or auction system.
you can Imagine that : A lender wants to lend funds at a fixed rate. A borrower wants to borrow funds at that same rate.
In this case, the orders from both parties need to be matched. Lender → Order → Matching ← Borrower If a matching buyer or seller cannot be found, executing the trade can be difficult.✅

Step 2 — What is the problem? lets explain.
Liquidity is crucial in the fixed-rate DeFi market. Suppose you want to trade at a 10% fixed rate. But at that moment: There is no counterparty on the other side for the 10% rate. In that case, your order might simply sit in the order book. In other words: No counterparty → No match → No execution This can reduce the market's usability.✅

Step 3 — Why are AMMs useful in the fixed-rate market? let explain.
The key factor here is rate discovery. Suppose that, based on current market conditions, the fixed borrowing rate is shifting from 8% towards 10%. An AMM's pricing mechanism can reflect these rate changes through liquidity and trading activity. This means a user does not have to rely entirely on finding a counterparty for a specific rate—such as exactly 9.5%—to make a trade.

Step 4— The role of liquidity providers In an AMM, liquidity providers (LPs) can supply liquidity to the pool. By doing so, they provide liquidity to the market, which traders, borrowers, and lenders can then utilize. Simply put: LP → Liquidity Pool → Market participants → Trade This has the potential to facilitate market liquidity bootstrapping.

I am try to explain with some example hope you will gain some knowledge by my post 🥰🥰


#termmax @TermMax