#termmax @TermMax
In recent days, I've found myself thinking about TermMax in a somewhat new light. While previously I perceived fixed-rate lending as simply providing some level of certainty for both borrowers and lenders, the more I thought about the design of the protocol, the more I started thinking about the consequences of collateral being illiquid.
Unlike in regular DeFi lending, where it is easy to estimate and sell such assets as BTC, ETH, or even stablecoins whenever a given position turns sour, real-world assets provide an opportunity to create value without immediately creating market liquidity.
This is where TermMax's concept of physical delivery starts becoming interesting. By relying not only on secondary market trading but also providing certain circumstances where an asset can actually be physically delivered to the lender, there is one more option available when the liquidity of the market is limited.
At the same time, I believe this idea is perfectly matched with fixed-rate lending. By determining upfront interest rates and maturity, lenders and borrowers are provided with a framework in which to work with the risk profile. One of the critical issues here is not only the estimation of the value of the asset but the ways
In recent days, I've found myself thinking about TermMax in a somewhat new light. While previously I perceived fixed-rate lending as simply providing some level of certainty for both borrowers and lenders, the more I thought about the design of the protocol, the more I started thinking about the consequences of collateral being illiquid.
Unlike in regular DeFi lending, where it is easy to estimate and sell such assets as BTC, ETH, or even stablecoins whenever a given position turns sour, real-world assets provide an opportunity to create value without immediately creating market liquidity.
This is where TermMax's concept of physical delivery starts becoming interesting. By relying not only on secondary market trading but also providing certain circumstances where an asset can actually be physically delivered to the lender, there is one more option available when the liquidity of the market is limited.
At the same time, I believe this idea is perfectly matched with fixed-rate lending. By determining upfront interest rates and maturity, lenders and borrowers are provided with a framework in which to work with the risk profile. One of the critical issues here is not only the estimation of the value of the asset but the ways