FROM DEPOSIT TO GETTING PAID: WORKING MECHANICS AT TERMMAX
I have checked and tested some of the systems myself; while others I have studied in their officials docs.
Here is the simple breakdown of what I came to know about the protocol:
TermMax is a Fixed-rate, Fixed-term DeFi protocol on Ethereum, Arbitrum, BNB Chain, Base and Berachain that utilizes zero-coupon bond model to lock rates and maturity at entry. Idle funds, until matched by the engine, can earn floating yield with Aave, Morpho etc.
HOW IT RUNS: DEPOSIT TO PAYOUT
Lending / Fixed Income (Fixed Term):
1. Deposit debt tokens into a market, range/limit order, or curator vault. Idle capital earns base floating yield.
2. Deposit mints FT + XT: XT is exchanged into the matching order → you hold FTs at a discount. Rate and term are fixed.
3. Hold (or trade early).
4. At maturity, redeem FTs for full face value of the debt token (principal + locked yield). Defaults use physical delivery of collateral if needed.
Borrowing:
Choose market/term and matching lending range order.
Lock collateral into a GT and issue FTs equal to the full repayment amount (principal + fixed interest).
Split FTs - sell interest portion for XTs - combine with principal FTs to redeem debt tokens instantly to your wallet. Debt is recorded on the GT.
Repay anytime (or at maturity) with debt tokens or by buying discounted FTs (can lower cost). Collateral is released and GT burned.
Non-repayment at maturity opens a short liquidation window, then physical delivery.
Vault path (passive Fixed Income):
Deposit - curator places orders (V2 atomic orders improve efficiency) - earn base yield while unmatched + fixed yield when matched - receive principal + yields at maturity or via early exit (smart unwind).
Rates never float after entry. Over-collateralization + physical delivery protect lenders; borrowers face liquidation only on LTV breach or missed maturity. Early exits are possible via secondary markets or V2 smart unwind.
#termmax @TermMax
I have checked and tested some of the systems myself; while others I have studied in their officials docs.
Here is the simple breakdown of what I came to know about the protocol:
TermMax is a Fixed-rate, Fixed-term DeFi protocol on Ethereum, Arbitrum, BNB Chain, Base and Berachain that utilizes zero-coupon bond model to lock rates and maturity at entry. Idle funds, until matched by the engine, can earn floating yield with Aave, Morpho etc.
HOW IT RUNS: DEPOSIT TO PAYOUT
Lending / Fixed Income (Fixed Term):
1. Deposit debt tokens into a market, range/limit order, or curator vault. Idle capital earns base floating yield.
2. Deposit mints FT + XT: XT is exchanged into the matching order → you hold FTs at a discount. Rate and term are fixed.
3. Hold (or trade early).
4. At maturity, redeem FTs for full face value of the debt token (principal + locked yield). Defaults use physical delivery of collateral if needed.
Borrowing:
Choose market/term and matching lending range order.
Lock collateral into a GT and issue FTs equal to the full repayment amount (principal + fixed interest).
Split FTs - sell interest portion for XTs - combine with principal FTs to redeem debt tokens instantly to your wallet. Debt is recorded on the GT.
Repay anytime (or at maturity) with debt tokens or by buying discounted FTs (can lower cost). Collateral is released and GT burned.
Non-repayment at maturity opens a short liquidation window, then physical delivery.
Vault path (passive Fixed Income):
Deposit - curator places orders (V2 atomic orders improve efficiency) - earn base yield while unmatched + fixed yield when matched - receive principal + yields at maturity or via early exit (smart unwind).
Rates never float after entry. Over-collateralization + physical delivery protect lenders; borrowers face liquidation only on LTV breach or missed maturity. Early exits are possible via secondary markets or V2 smart unwind.
#termmax @TermMax