I kept coming back to this while studying @TermMax .

If you owe 100 USDC, the natural assumption is simple you need 100 USDC to close the debt.

But TermMax’s FT structure makes that assumption less rigid.

FTs are transferable and can trade in a secondary market, where price is driven by supply and demand. That means an FT representing a future debt payment can sometimes trade below its face value.

So a borrower has another calculation to make.

Is it cheaper to sell collateral and repay normally, or buy the discounted FT and use it to close the obligation?

That distinction matters because collateral sales can introduce slippage and execution costs.

I don’t see this as free arbitrage. Liquidity, maturity, spread and gas can easily erase the discount.

What I find more interesting is the change in behavior.
Debt stops being something you simply owe.

It becomes something you can potentially shop for.

That makes me wonder whether FT secondary market discounts could become an overlooked source of capital efficiency in $TMX markets.

#termmax #TermMax #Termmax