#termmax @TermMax Honestly While digging through TermMax I found myself asking a different question? what happens when a fixed rate loan reaches maturity but the borrower still cannot repay?

The mechanism is straightforward on paper. Collateral sits inside a Gearing Token (GT) while Fixed rate Tokens (FTs) represent the debt due at maturity. Borrowers can repay directly or acquire FTs from the market to settle the position.

The interesting part comes after the deadline.

TermMax says an unpaid position can enter a two hour liquidation window. Liquidators receive an incentive, but if liquidation remains incomplete the protocol moves to physical delivery where FT holders receive a proportional mix of underlying and collateral assets.

That design avoids assuming every liquidation will execute perfectly.

But it creates a different dependency: can the resulting collateral actually be absorbed efficiently?

TermMax acknowledges DEX liquidity and market disruption as risks to liquidation and redemption.

So I’d watch what happens to liquidation execution and collateral liquidity around maturity, not simply the advertised fixed yield.