#termmax @TermMax
Alice's TermMax example starts pretty simply.
ETH goes in as collateral. She ends up owing 1,600 USDC at maturity. The leveraged position gets wrapped into one Gearing Token instead of being managed through separate loops.
Then I noticed something at the other end.
At maturity, Alice doesn't necessarily have to hand over 1,600 USDC.
She can buy 1,600 FTs from the market instead.
If those FTs are trading at $0.95, that's $1,520 to settle a 1,600 USDC obligation.
Potentially $80 saved just by choosing the other settlement route.
That's the part I hadn't really connected before.
GT isn't only packaging the leveraged position on entry.
It creates a second market decision at exit.
The debt is fixed.
The maturity is fixed.
But the cheapest way to settle it can change.
So holding a GT isn't just carrying leverage until maturity.
You're also carrying an exit decision.
And that decision depends on what the FT market looks like when you actually need to close.
$TMX isn't live yet, so I'm not going to pretend this has token value implications today.
But if GT becomes a major way users enter leveraged positions, FT liquidity and pricing become much more important to the experience.
At maturity, the debt doesn't change.
The decision does.
What I'm still curious about is whether that $80 opportunity remains available when GT usage gets large, or whether deeper GT demand eventually makes the FT discount too small to matter.
Alice's TermMax example starts pretty simply.
ETH goes in as collateral. She ends up owing 1,600 USDC at maturity. The leveraged position gets wrapped into one Gearing Token instead of being managed through separate loops.
Then I noticed something at the other end.
At maturity, Alice doesn't necessarily have to hand over 1,600 USDC.
She can buy 1,600 FTs from the market instead.
If those FTs are trading at $0.95, that's $1,520 to settle a 1,600 USDC obligation.
Potentially $80 saved just by choosing the other settlement route.
That's the part I hadn't really connected before.
GT isn't only packaging the leveraged position on entry.
It creates a second market decision at exit.
The debt is fixed.
The maturity is fixed.
But the cheapest way to settle it can change.
So holding a GT isn't just carrying leverage until maturity.
You're also carrying an exit decision.
And that decision depends on what the FT market looks like when you actually need to close.
$TMX isn't live yet, so I'm not going to pretend this has token value implications today.
But if GT becomes a major way users enter leveraged positions, FT liquidity and pricing become much more important to the experience.
At maturity, the debt doesn't change.
The decision does.
What I'm still curious about is whether that $80 opportunity remains available when GT usage gets large, or whether deeper GT demand eventually makes the FT discount too small to matter.