The interest is already paid before you've held it a day
The docs' own leverage example is worth walking slowly, because the last line changes what the product is.
Alice puts in 1,000 USDC. A flash loan adds 2,000. She buys 3 ETH at $1,000 each and locks it as collateral.
When the transaction settles, her position reads: 3 ETH collateral, 2,100 USDC debt.
She borrowed 2,000. The recorded debt is 2,100. The full term's interest was written into the position at entry — not accrued day by day.
That's what a fixed rate means mechanically. The number is settled the moment you open, because there's nothing left to accrue.
The consequence is the part people skip. Exit halfway through the term and the debt you're repaying was still built on the whole term. A floating-rate loop stops charging when you close it. This one already charged.
I'd want to see how early exits price in practice before calling that expensive — the secondary market may absorb some of it.
Would you still open a fixed-rate leveraged position if you expected to exit at half the term?
#termmax @TermMax $ETH
The docs' own leverage example is worth walking slowly, because the last line changes what the product is.
Alice puts in 1,000 USDC. A flash loan adds 2,000. She buys 3 ETH at $1,000 each and locks it as collateral.
When the transaction settles, her position reads: 3 ETH collateral, 2,100 USDC debt.
She borrowed 2,000. The recorded debt is 2,100. The full term's interest was written into the position at entry — not accrued day by day.
That's what a fixed rate means mechanically. The number is settled the moment you open, because there's nothing left to accrue.
The consequence is the part people skip. Exit halfway through the term and the debt you're repaying was still built on the whole term. A floating-rate loop stops charging when you close it. This one already charged.
I'd want to see how early exits price in practice before calling that expensive — the secondary market may absorb some of it.
Would you still open a fixed-rate leveraged position if you expected to exit at half the term?
#termmax @TermMax $ETH