RWA lending has a problem I find more interesting than the tokenization itself:
how do you know a collateral market is actually healthy?
TVL can look impressive.
A new asset can attract attention.
Borrowing volume can spike.
None of those tells me whether the market has developed real two-sided demand.
That is where I think @TermMax has an interesting setup to observe.
When financing is arranged around defined terms instead of one constantly changing pool rate the behaviour of lenders & borrowers becomes easier to examine.
Who is willing to provide capital?
Who is willing to pay for it?
How long are they willing to commit?
And what happens when the easy liquidity disappears?
Those questions matter even more for tokenized assets because liquidity conditions can vary dramatically from one asset to another.
I did rather see a smaller market where participants keep returning under normal conditions than a huge number that only looks active while incentives are doing the heavy lifting.
So if TermMax expands deeper into RWA credit I would not be watching the headline TVL first.
I will be watching whether the market keeps functioning when nobody is being heavily paid to participate.
That to me is a much harder - & much more useful - test of real adoption.
Do you judge protocols by their peak TVL or do you look at organic activity without incentives?
#termmax
how do you know a collateral market is actually healthy?
TVL can look impressive.
A new asset can attract attention.
Borrowing volume can spike.
None of those tells me whether the market has developed real two-sided demand.
That is where I think @TermMax has an interesting setup to observe.
When financing is arranged around defined terms instead of one constantly changing pool rate the behaviour of lenders & borrowers becomes easier to examine.
Who is willing to provide capital?
Who is willing to pay for it?
How long are they willing to commit?
And what happens when the easy liquidity disappears?
Those questions matter even more for tokenized assets because liquidity conditions can vary dramatically from one asset to another.
I did rather see a smaller market where participants keep returning under normal conditions than a huge number that only looks active while incentives are doing the heavy lifting.
So if TermMax expands deeper into RWA credit I would not be watching the headline TVL first.
I will be watching whether the market keeps functioning when nobody is being heavily paid to participate.
That to me is a much harder - & much more useful - test of real adoption.
Do you judge protocols by their peak TVL or do you look at organic activity without incentives?
#termmax