@TermMax I initially thought fixed-term lending meant the same tradeoff as a bank CD: you commit for the duration, and liquidity before maturity isn't really available. TermMax breaks that assumption because FT itself is a standard tradable token, not a locked claim. A lender holding FT isn't stuck until maturity - they can sell that position on the open market at any point during the term.
This separates two things usually bundled together: the commitment and the liquidity of holding it. A lender can enter a long-duration market for the better rate, then exit early if their view changes, without the protocol needing to unwind anything. The market absorbs that decision instead. As maturity approaches, FT's price should drift toward face value, since there's less time left for rates to move against the holder - so the size of the discount at any given moment is really a read on how much time-risk the market is still pricing in.
The catch is that early exit isn't guaranteed at face value. If a term still has significant time remaining, selling FT means accepting whatever yield the current market implies, not the one originally locked in.
What I'd watch is how tightly FT price tracks that theoretical convergence path as maturity nears, versus how much it deviates when a term still has months left - that gap shows how efficiently the secondary market is actually pricing time.
A tradable claim on a commitment is not the same as being free from that commitment.
#termmax @TermMax $BB $PEOPLE $ONG
This separates two things usually bundled together: the commitment and the liquidity of holding it. A lender can enter a long-duration market for the better rate, then exit early if their view changes, without the protocol needing to unwind anything. The market absorbs that decision instead. As maturity approaches, FT's price should drift toward face value, since there's less time left for rates to move against the holder - so the size of the discount at any given moment is really a read on how much time-risk the market is still pricing in.
The catch is that early exit isn't guaranteed at face value. If a term still has significant time remaining, selling FT means accepting whatever yield the current market implies, not the one originally locked in.
What I'd watch is how tightly FT price tracks that theoretical convergence path as maturity nears, versus how much it deviates when a term still has months left - that gap shows how efficiently the secondary market is actually pricing time.
A tradable claim on a commitment is not the same as being free from that commitment.
#termmax @TermMax $BB $PEOPLE $ONG