I went down a bit of a rabbit hole today looking at how TermMax handles collateral when a fixed-term loan actually goes wrong.
One thing that stood out was the physical delivery mechanism. The docs describe a path where, if a loan remains unpaid or only partially liquidated after the liquidation window, redemption can involve both the underlying and the collateral rather than assuming everything has to be sold immediately.
That got me thinking differently about RWAs. We often talk about tokenization as if putting an asset on-chain automatically makes it liquid. It doesn’t. If the underlying asset has thin secondary liquidity, the real question is what happens when a borrower defaults.
TermMax is already experimenting with RWA collateral, including tokenized stocks and commodities, while its contracts also expose delivery-related functionality such as "previewDelivery".
I’m still trying to figure out how robust this becomes with genuinely illiquid assets. Fixed rates solve one problem—knowing the borrowing or lending terms upfront—but they don’t magically solve collateral disposal.
No strong conclusion yet. I’m more interested in the edge case than the headline.
Has anyone looked closely at TermMax’s physical delivery flow or compared it with how other RWA lending protocols handle default? I’d be interested to compare notes.
$BTC
$ORDI
$BOME
#termmax @TermMax
One thing that stood out was the physical delivery mechanism. The docs describe a path where, if a loan remains unpaid or only partially liquidated after the liquidation window, redemption can involve both the underlying and the collateral rather than assuming everything has to be sold immediately.
That got me thinking differently about RWAs. We often talk about tokenization as if putting an asset on-chain automatically makes it liquid. It doesn’t. If the underlying asset has thin secondary liquidity, the real question is what happens when a borrower defaults.
TermMax is already experimenting with RWA collateral, including tokenized stocks and commodities, while its contracts also expose delivery-related functionality such as "previewDelivery".
I’m still trying to figure out how robust this becomes with genuinely illiquid assets. Fixed rates solve one problem—knowing the borrowing or lending terms upfront—but they don’t magically solve collateral disposal.
No strong conclusion yet. I’m more interested in the edge case than the headline.
Has anyone looked closely at TermMax’s physical delivery flow or compared it with how other RWA lending protocols handle default? I’d be interested to compare notes.
$BTC
$ORDI
$BOME
#termmax @TermMax