One detail in @TermMax ’s range orders caught my attention.
Borrowers and lenders get the same basic tool, but they want the curve to behave in opposite directions.
Officially, both sides can split their liquidity across different rate ranges instead of accepting one rate.
But the incentives are asymmetric.
For a borrower, earlier fills are preferable at a higher rate, so the borrowing curve moves from higher to lower rates as more liquidity is filled.
For a lender, it’s the opposite: earlier fills are preferable at a lower rate, so the lending curve moves from lower to higher rates.
That sounds like a small implementation detail.
I don't think it is.
Imagine a lender has $1,000:
▶ First $800: 10% APR
▶ Remaining $200: 15% APR
The lender is saying: “Give me the better rate first. I’ll accept a worse rate for the marginal liquidity.”
Now flip the perspective.
A borrower might structure:
▶ First $800: 15% APR
▶ Remaining $200: 10% APR
The borrower is saying: “I’m willing to take the more expensive liquidity first, but I want cheaper capital if I need more.”
Same range-order framework.
Opposite economic preference.
That’s the interesting part.
Most people probably see range orders as one feature.
But there are really two parallel mechanisms:
Lender: lower → higher rate
Borrower: higher → lower rate
And that asymmetry makes sense if you think about marginal willingness.
A lender is willing to deploy more capital only if compensation improves.
A borrower is willing to borrow more only if the marginal cost improves.
I like this design because it lets the curve express something a single APR cannot: how each side values additional liquidity.
But I’m genuinely not sure how much this matters in real markets.
If most orders are filled inside the first range anyway, the second and third cut points may not add much practical information.
The interesting metric for me would be the distribution of actual fills across those ranges.
@TermMax #TermMax $TMX $BTW
Borrowers and lenders get the same basic tool, but they want the curve to behave in opposite directions.
Officially, both sides can split their liquidity across different rate ranges instead of accepting one rate.
But the incentives are asymmetric.
For a borrower, earlier fills are preferable at a higher rate, so the borrowing curve moves from higher to lower rates as more liquidity is filled.
For a lender, it’s the opposite: earlier fills are preferable at a lower rate, so the lending curve moves from lower to higher rates.
That sounds like a small implementation detail.
I don't think it is.
Imagine a lender has $1,000:
▶ First $800: 10% APR
▶ Remaining $200: 15% APR
The lender is saying: “Give me the better rate first. I’ll accept a worse rate for the marginal liquidity.”
Now flip the perspective.
A borrower might structure:
▶ First $800: 15% APR
▶ Remaining $200: 10% APR
The borrower is saying: “I’m willing to take the more expensive liquidity first, but I want cheaper capital if I need more.”
Same range-order framework.
Opposite economic preference.
That’s the interesting part.
Most people probably see range orders as one feature.
But there are really two parallel mechanisms:
Lender: lower → higher rate
Borrower: higher → lower rate
And that asymmetry makes sense if you think about marginal willingness.
A lender is willing to deploy more capital only if compensation improves.
A borrower is willing to borrow more only if the marginal cost improves.
I like this design because it lets the curve express something a single APR cannot: how each side values additional liquidity.
But I’m genuinely not sure how much this matters in real markets.
If most orders are filled inside the first range anyway, the second and third cut points may not add much practical information.
The interesting metric for me would be the distribution of actual fills across those ranges.
@TermMax #TermMax $TMX $BTW