#termmax @TermMax The more I looked at fixed-rate lending, the more one question bothered me:
What happens when the market moves against the borrower?
At first, I thought the answer was simply “liquidation.” But digging into TermMax made me look at the risk structure differently.
A TermMax market doesn't rely on one LTV number. It uses LLTV and MLTV — two different thresholds that separate normal borrowing conditions from the point where a position becomes exposed to liquidation.
That distinction matters.
Imagine borrowing against ETH when everything looks comfortable. Then ETH drops sharply. A single threshold would make the system treat every stage of that decline almost the same.
With separate thresholds, the protocol can distinguish between the level at which a position becomes unhealthy and the level where stronger risk actions become necessary.
I think that's an important reason @TermMax chose this mechanism: fixed-rate lending isn't only about fixing the interest rate. It also needs a clearly defined way to manage collateral risk as market conditions change.
The interesting part is that predictable borrowing doesn't mean predictable markets.
It means the protocol needs better rules for dealing with the unpredictable ones.
Would you rather have a lending protocol with simpler risk rules, or one with more layers of risk parameters if they make the system more precise?
$TMX #TermMax $TUT $BNB
What happens when the market moves against the borrower?
At first, I thought the answer was simply “liquidation.” But digging into TermMax made me look at the risk structure differently.
A TermMax market doesn't rely on one LTV number. It uses LLTV and MLTV — two different thresholds that separate normal borrowing conditions from the point where a position becomes exposed to liquidation.
That distinction matters.
Imagine borrowing against ETH when everything looks comfortable. Then ETH drops sharply. A single threshold would make the system treat every stage of that decline almost the same.
With separate thresholds, the protocol can distinguish between the level at which a position becomes unhealthy and the level where stronger risk actions become necessary.
I think that's an important reason @TermMax chose this mechanism: fixed-rate lending isn't only about fixing the interest rate. It also needs a clearly defined way to manage collateral risk as market conditions change.
The interesting part is that predictable borrowing doesn't mean predictable markets.
It means the protocol needs better rules for dealing with the unpredictable ones.
Would you rather have a lending protocol with simpler risk rules, or one with more layers of risk parameters if they make the system more precise?
$TMX #TermMax $TUT $BNB
