The more I look at @TermMax 's Range Orders, the more I question the idea of a single lending rate.
Say I’m willing to lend $100K at 8%.
Would I really price the next $900K of my liquidity at the same 8%?
Probably not.
The more of my capital gets committed, the more I have to think about concentration, liquidity and what else that capital could be doing. So for me, the interesting part of a Range Order isn’t simply that I can choose a rate.
It’s that I can make my rate change as more of my liquidity gets taken.
That feels closer to how capital is actually priced.
The first $100K can be relatively cheap. If the market wants another $400K, maybe my required return moves higher. Instead of placing five different orders to express that preference, the curve itself can carry it.
But there’s a trade-off here too.
A more expressive order gives the liquidity provider more control, but it also means more responsibility for deciding where that curve should sit.
And that makes me wonder:
Are we moving from markets where liquidity has one price to markets where liquidity itself can have a pricing strategy?
That feels like a much bigger shift than just adding another order type.
#termmax @TermMax
Say I’m willing to lend $100K at 8%.
Would I really price the next $900K of my liquidity at the same 8%?
Probably not.
The more of my capital gets committed, the more I have to think about concentration, liquidity and what else that capital could be doing. So for me, the interesting part of a Range Order isn’t simply that I can choose a rate.
It’s that I can make my rate change as more of my liquidity gets taken.
That feels closer to how capital is actually priced.
The first $100K can be relatively cheap. If the market wants another $400K, maybe my required return moves higher. Instead of placing five different orders to express that preference, the curve itself can carry it.
But there’s a trade-off here too.
A more expressive order gives the liquidity provider more control, but it also means more responsibility for deciding where that curve should sit.
And that makes me wonder:
Are we moving from markets where liquidity has one price to markets where liquidity itself can have a pricing strategy?
That feels like a much bigger shift than just adding another order type.
#termmax @TermMax