TermMax introduces three specialized tokens
Fixed-Rate Token (FT)
Type Fungible Token (ERC-20)
Function Acts as a zero-coupon bond, representing a commitment to repay 1 debt token "1 USDC" at maturity.
Dynamics: FTs are sold at a discount before maturity (20% discount), allowing lenders to earn a fixed return by redeeming them at full face value upon maturity.
X Token (XT)
Type: Fungible Token
Function: Complements FTs to ensure the value parity of 1 debt token.
Dynamics: At any moment, 1 FT + 1 XT = 1 debt token. Upon reaching maturity, FTs can be redeemed for debt tokens, rendering XT worthless (value drops to zero).
Gearing Token (GT)
Type: Non-Fungible Token (ERC-721)
Function: Represents an individual loan position, tracking both the collateral locked and the debt issued.
Dynamics: Each GT records the amount of collateral and the corresponding number of FTs minted, up to the market’s maximum loan-to-value (MLTV) ratio.
Borrowing Process
Locking Collateral and Minting GT + FT:
Borrower Action: The borrower locks a specified amount of collateral (e.g., ETH) into a GT.
Token Minting: For each debt token worth of USDC the borrower wishes to take, TermMax mints 1 FT. The total number of FTs minted is capped by the Maximum Loan-to-Value (MLTV) defined in the market (MLTV of 0.8 allows 1 ETH at $1,000 to back up to 800 USDC as debt).
Selling FTs for Immediate Liquidity:
Borrower Action: After minting, the borrower sells FTs on the open market at a discount (e.g., 20% discount, selling each FT for $0.80).
Result: Borrowers receive immediate liquidity (e.g., 800 FTs × $0.80 = $640) while committing to repay the full debt (800 USDC) at maturity.
Lending Process
Purchasing FTs:
Lender Action: Lenders buy FTs at a discounted rate ( $0.80 per FT).
Yield Mechanism: At maturity, each FT can be redeemed for 1 debt token (e.g., 1 USDC), providing lenders with a fixed return (25% gain from $0.80 to $1.00).
Redemption at Maturity:
Lender Action: Upon reaching the maturity date.
#termmax @TermMax
Fixed-Rate Token (FT)
Type Fungible Token (ERC-20)
Function Acts as a zero-coupon bond, representing a commitment to repay 1 debt token "1 USDC" at maturity.
Dynamics: FTs are sold at a discount before maturity (20% discount), allowing lenders to earn a fixed return by redeeming them at full face value upon maturity.
X Token (XT)
Type: Fungible Token
Function: Complements FTs to ensure the value parity of 1 debt token.
Dynamics: At any moment, 1 FT + 1 XT = 1 debt token. Upon reaching maturity, FTs can be redeemed for debt tokens, rendering XT worthless (value drops to zero).
Gearing Token (GT)
Type: Non-Fungible Token (ERC-721)
Function: Represents an individual loan position, tracking both the collateral locked and the debt issued.
Dynamics: Each GT records the amount of collateral and the corresponding number of FTs minted, up to the market’s maximum loan-to-value (MLTV) ratio.
Borrowing Process
Locking Collateral and Minting GT + FT:
Borrower Action: The borrower locks a specified amount of collateral (e.g., ETH) into a GT.
Token Minting: For each debt token worth of USDC the borrower wishes to take, TermMax mints 1 FT. The total number of FTs minted is capped by the Maximum Loan-to-Value (MLTV) defined in the market (MLTV of 0.8 allows 1 ETH at $1,000 to back up to 800 USDC as debt).
Selling FTs for Immediate Liquidity:
Borrower Action: After minting, the borrower sells FTs on the open market at a discount (e.g., 20% discount, selling each FT for $0.80).
Result: Borrowers receive immediate liquidity (e.g., 800 FTs × $0.80 = $640) while committing to repay the full debt (800 USDC) at maturity.
Lending Process
Purchasing FTs:
Lender Action: Lenders buy FTs at a discounted rate ( $0.80 per FT).
Yield Mechanism: At maturity, each FT can be redeemed for 1 debt token (e.g., 1 USDC), providing lenders with a fixed return (25% gain from $0.80 to $1.00).
Redemption at Maturity:
Lender Action: Upon reaching the maturity date.
#termmax @TermMax