I did not trust TermMax's fixed rate mechanism until I sat with the math long enough to understand where the rate actually comes from.
TermMax uses customized bonding curves rather than linear pricing to calculate fixed rates across different maturity points. The non-linearity is intentional. Interest rate markets do not behave linearly and a curve that pretends they do misprices risk at the edges where it matters most.
What the bonding curve produces is a rate that responds to supply and demand within a maturity tranche without requiring constant manual adjustment. The mechanism is elegant in principle.
What I kept checking was whether the curve parameters were set by the protocol, by governance, or by someone with interests I should understand before I lend anything.
#termmax @TermMax
$STAR
$RED
$ACE
TermMax uses customized bonding curves rather than linear pricing to calculate fixed rates across different maturity points. The non-linearity is intentional. Interest rate markets do not behave linearly and a curve that pretends they do misprices risk at the edges where it matters most.
What the bonding curve produces is a rate that responds to supply and demand within a maturity tranche without requiring constant manual adjustment. The mechanism is elegant in principle.
What I kept checking was whether the curve parameters were set by the protocol, by governance, or by someone with interests I should understand before I lend anything.
#termmax @TermMax
$STAR
$RED
$ACE