I’ve been thinking about one TermMax feature that doesn’t get enough attention: what happens when liquidation doesn’t go perfectly?
In DeFi, we often talk about liquidation as if selling collateral instantly solves everything. But real markets aren’t always that clean. Liquidity can disappear, collateral can be difficult to sell, and a partial liquidation may not fully cover the position.
That’s where TermMax’s physical delivery mechanism becomes interesting to me.
Instead of treating an unsuccessful liquidation as simply “lender takes the loss,” the remaining collateral can be delivered proportionally to lenders. It changes the way I think about lender protection.
It also explains why TermMax’s design isn’t only about offering fixed rates. The bigger idea is building a lending market where the terms, maturity, collateral and failure scenario are defined upfront.
For me, predictable DeFi isn’t just knowing the interest rate.
It’s also knowing what happens when things go wrong.
#termmax @TermMax
In DeFi, we often talk about liquidation as if selling collateral instantly solves everything. But real markets aren’t always that clean. Liquidity can disappear, collateral can be difficult to sell, and a partial liquidation may not fully cover the position.
That’s where TermMax’s physical delivery mechanism becomes interesting to me.
Instead of treating an unsuccessful liquidation as simply “lender takes the loss,” the remaining collateral can be delivered proportionally to lenders. It changes the way I think about lender protection.
It also explains why TermMax’s design isn’t only about offering fixed rates. The bigger idea is building a lending market where the terms, maturity, collateral and failure scenario are defined upfront.
For me, predictable DeFi isn’t just knowing the interest rate.
It’s also knowing what happens when things go wrong.
#termmax @TermMax