16000u is the money I “inadvertently” lost on TermMax during the first half of the year—there were no single big losses; they were all small slippages that, added up, became a large sum.
Breaking it down: Gas and cross-chain bridge fees were about 7000u (frequent interactions over six months—each fee was only a few u to dozens of u, but the accumulation is terrifying); slippage was about 5500u (the order book for the FT market is thin; every buy and sell ends up costing a little more than expected—small amounts add up); and losses from selling XT residual value early were about 3500u (in a few trades I rushed to free up capital—XT filled at low prices, and I didn’t capture the full time value). Total: 16000u.
The cruelty of this accounting is that it leaves no memory. A big loss makes you review and hurts—friction losses don’t. They hide inside every “just go ahead and do it” operation. When I finally went through the ledger, I realized that over half of what I earned in fixed returns for the half-year was eaten away by friction.
So I changed the rules to three: if an operation can be done in one transaction, don’t split it into two; if you can place a limit order, don’t use market orders; and if you can hold until maturity, never sell early. Friction is an invisible tax rate on fixed returns, and the only way to “evade” that tax rate is to reduce the act of trading itself.
@TermMax #TermMax
Breaking it down: Gas and cross-chain bridge fees were about 7000u (frequent interactions over six months—each fee was only a few u to dozens of u, but the accumulation is terrifying); slippage was about 5500u (the order book for the FT market is thin; every buy and sell ends up costing a little more than expected—small amounts add up); and losses from selling XT residual value early were about 3500u (in a few trades I rushed to free up capital—XT filled at low prices, and I didn’t capture the full time value). Total: 16000u.
The cruelty of this accounting is that it leaves no memory. A big loss makes you review and hurts—friction losses don’t. They hide inside every “just go ahead and do it” operation. When I finally went through the ledger, I realized that over half of what I earned in fixed returns for the half-year was eaten away by friction.
So I changed the rules to three: if an operation can be done in one transaction, don’t split it into two; if you can place a limit order, don’t use market orders; and if you can hold until maturity, never sell early. Friction is an invisible tax rate on fixed returns, and the only way to “evade” that tax rate is to reduce the act of trading itself.
@TermMax #TermMax
