I started looking at TermMax from the fixed-rate side, but the deeper I went, the more interesting the pricing mechanism became.
Fixed-maturity claims are not new. Notional uses fCash, while Yield Protocol used fyTokens to represent claims that settle at a defined maturity. Pendle took a different path by splitting an asset into Principal and Yield Tokens.
TermMax seems to take another step.
Instead of treating the interest rate as one number for the whole transaction, its Range Order system lets a maker build a curve with different rate levels. One portion of capital can be matched at one rate, while later portions move through different rates as the order fills.
This made me look at TermMax less like a simple fixed-rate lending market and more like a system for expressing a view about how borrowing demand should be priced.
And there is a subtle consequence here.
The market is not only discovering a rate. The maker can define how that rate should change as liquidity is consumed.
To me, that is where TermMax becomes more interesting: it turns the pricing of time-bound credit into something programmable, rather than simply choosing one fixed number.
Please do not consider this financial advice. Its purpose is to inform and educate you, not to encourage you to invest.
#termmax @TermMax
Fixed-maturity claims are not new. Notional uses fCash, while Yield Protocol used fyTokens to represent claims that settle at a defined maturity. Pendle took a different path by splitting an asset into Principal and Yield Tokens.
TermMax seems to take another step.
Instead of treating the interest rate as one number for the whole transaction, its Range Order system lets a maker build a curve with different rate levels. One portion of capital can be matched at one rate, while later portions move through different rates as the order fills.
This made me look at TermMax less like a simple fixed-rate lending market and more like a system for expressing a view about how borrowing demand should be priced.
And there is a subtle consequence here.
The market is not only discovering a rate. The maker can define how that rate should change as liquidity is consumed.
To me, that is where TermMax becomes more interesting: it turns the pricing of time-bound credit into something programmable, rather than simply choosing one fixed number.
Please do not consider this financial advice. Its purpose is to inform and educate you, not to encourage you to invest.
#termmax @TermMax