I've been reading through how TermMax handles liquidations, because most protocols only explain their liquidation logic in the docs nobody reads until it's their position getting closed out.

The setup is different from the standard on-chain auction model. When a Gearing Token's collateral value falls below its debt threshold, TermMax doesn't just force-sell into whatever liquidity happens to exist at that moment — it supports physical delivery, where the collateral itself can be delivered directly to settle the debt instead of routing everything through an open-market sale. That matters most for the assets TermMax is built to support beyond blue-chip crypto — real-world assets and lower-liquidity tokens, the exact collateral types that get destroyed in price during a forced sale on a thin order book.

What I still want to see is how this performs during a multi-asset stress event, not a single isolated liquidation. Physical delivery solves the thin-liquidity problem for one position at a time, but I haven't found data yet on how the mechanism holds up when a large number of GTs need unwinding simultaneously across different collateral types at once.

#termmax @TermMax $TMX