I was reading through the TermMax docs and one small detail made me rethink what “fixed-rate borrowing” actually means here.
At first, I assumed it worked like a simple lending market: there’s a rate on the screen, you borrow, and that’s basically the end of it.
But TermMax is a little different.
The liquidity can sit across a range of rates. So the rate you end up getting also depends on how much liquidity is available and how large your order is. A smaller borrow might get filled around the better part of that range, while a bigger one can reach liquidity priced at a higher rate.
That sounds obvious once you understand the system, but I don’t think it’s obvious when you first see the words “fixed rate.”
The important part is that the rate becomes fixed after the trade is executed. From a borrower’s perspective, that’s useful because you can actually know your borrowing cost instead of constantly watching a variable APY move around.
The other side is that users still need to pay attention before entering the position. The displayed rate and the rate you actually execute at aren’t necessarily the same thing for every order size.
I can understand why TermMax works this way. Liquidity isn’t unlimited, and different amounts have to be priced somehow. But I also think this is the kind of detail that needs to be very clear in the interface, especially for people coming from normal lending pools.
Makes me curious: when people hear “fixed-rate DeFi,” do they expect a fixed market price, or just a fixed cost once their position is open?
@TermMax #TermMax
At first, I assumed it worked like a simple lending market: there’s a rate on the screen, you borrow, and that’s basically the end of it.
But TermMax is a little different.
The liquidity can sit across a range of rates. So the rate you end up getting also depends on how much liquidity is available and how large your order is. A smaller borrow might get filled around the better part of that range, while a bigger one can reach liquidity priced at a higher rate.
That sounds obvious once you understand the system, but I don’t think it’s obvious when you first see the words “fixed rate.”
The important part is that the rate becomes fixed after the trade is executed. From a borrower’s perspective, that’s useful because you can actually know your borrowing cost instead of constantly watching a variable APY move around.
The other side is that users still need to pay attention before entering the position. The displayed rate and the rate you actually execute at aren’t necessarily the same thing for every order size.
I can understand why TermMax works this way. Liquidity isn’t unlimited, and different amounts have to be priced somehow. But I also think this is the kind of detail that needs to be very clear in the interface, especially for people coming from normal lending pools.
Makes me curious: when people hear “fixed-rate DeFi,” do they expect a fixed market price, or just a fixed cost once their position is open?
@TermMax #TermMax