#termmax @TermMax I had another look into the TermMax documentation, trying to figure out what the meaning of “fixed-rate” actually is in decentralized lending and borrowing.
Initially, the most appealing thing was just that one could borrow/lend at a defined rate. However, the more I read, the more I was intrigued by the underlying mechanisms.
How does the protocol deal with balancing predictability of interest rate with fluctuating market conditions? What will happen to the positions if the liquidity unexpectedly becomes fragmented? And when options trading operates within the same protocol, how is each source of risk isolated?
Then there was the issue of governance.
Decentralization can be technically true for a protocol, yet crucial decisions might be made by a few key individuals behind it. I didn’t manage to collect enough evidence regarding the degree of decentralization of TermMax’s governance process, which is why this remains an unresolved issue.
Another subject I want to analyze more thoroughly would be security. While vulnerabilities in smart contracts can be an issue, there is a totally different set of dangers, including volatility, liquidations, oracle problems, and liquidity stress.
Surely, my vision has been completely transformed from “fixed-rate DeFi” to the broader question of predictability of financial instruments in blockchain.
What is the key component of TermMax’s infrastructure?
@TermMax $TERM #TERM
Initially, the most appealing thing was just that one could borrow/lend at a defined rate. However, the more I read, the more I was intrigued by the underlying mechanisms.
How does the protocol deal with balancing predictability of interest rate with fluctuating market conditions? What will happen to the positions if the liquidity unexpectedly becomes fragmented? And when options trading operates within the same protocol, how is each source of risk isolated?
Then there was the issue of governance.
Decentralization can be technically true for a protocol, yet crucial decisions might be made by a few key individuals behind it. I didn’t manage to collect enough evidence regarding the degree of decentralization of TermMax’s governance process, which is why this remains an unresolved issue.
Another subject I want to analyze more thoroughly would be security. While vulnerabilities in smart contracts can be an issue, there is a totally different set of dangers, including volatility, liquidations, oracle problems, and liquidity stress.
Surely, my vision has been completely transformed from “fixed-rate DeFi” to the broader question of predictability of financial instruments in blockchain.
What is the key component of TermMax’s infrastructure?
@TermMax $TERM #TERM