How many of you got liquidated using heavy leverage during a volatile move?
I got liquidated on $BTC and $HYPE before, so TermMax immediately caught my attention.
I had mentally put fixed-rate + fixed-term in the same box as predictable risk.
Then I looked at what actually happens when the collateral moves.
The rate stays fixed. The maturity stays fixed.
The position doesn't.
Once a TermMax loan breaches its LLTV threshold, liquidation becomes possible. And if maturity arrives without repayment, the position enters a liquidation window.
Then I found one detail that made me look at the risk differently.
For debt above $10,000, liquidators can liquidate up to 50% of the debt, with a 10% penalty on the liquidated amount.
So liquidation doesn't necessarily mean the whole position disappears.
Half can go while the other half remains.
That got me thinking about liquidation differently.
I used to ask: “Can my position get liquidated?”
Now I'd rather know: “What does my position look like after liquidation starts?”
Because the fixed rate tells me what the debt costs.
It doesn't tell me what survives when the collateral gets hit.
@TermMax @TermMax
#TermMax
I got liquidated on $BTC and $HYPE before, so TermMax immediately caught my attention.
I had mentally put fixed-rate + fixed-term in the same box as predictable risk.
Then I looked at what actually happens when the collateral moves.
The rate stays fixed. The maturity stays fixed.
The position doesn't.
Once a TermMax loan breaches its LLTV threshold, liquidation becomes possible. And if maturity arrives without repayment, the position enters a liquidation window.
Then I found one detail that made me look at the risk differently.
For debt above $10,000, liquidators can liquidate up to 50% of the debt, with a 10% penalty on the liquidated amount.
So liquidation doesn't necessarily mean the whole position disappears.
Half can go while the other half remains.
That got me thinking about liquidation differently.
I used to ask: “Can my position get liquidated?”
Now I'd rather know: “What does my position look like after liquidation starts?”
Because the fixed rate tells me what the debt costs.
It doesn't tell me what survives when the collateral gets hit.
@TermMax @TermMax
#TermMax