I originally thought TermMax was just adding a fixed-interest-rate button to the lending pool. But when I read the Range Order, I realized the interest rate isn’t hard-coded as a single number written by the project.
Market makers or Curators can split the funds into multiple ranges, set APR boundaries and capacity for each segment; as orders get filled, the interest rate changes along the curve.
In the same market, you can also have borrowing, lending, or two-way orders coexisting. It’s like tiered wholesale pricing—only the “goods” are the right to use funds for a certain period.
It can be simplified to APR = f(q, t): q is the filled quantity, and t is the remaining time to maturity. Different intervals use different curve parameters. The theoretical interest spread for two-way market making is Δr = lending APR − borrowing APR, but it’s not net profit—you still have to account for idle capital, fees, price volatility, and the risk of bad debts. The closer an order is to the next range, the marginal interest rate may also change.
I think this design is more suitable than a single fund pool for fixed-term markets, because both the maturity and depth can be reflected in the price. But free (curved) pricing also shifts responsibility to the Curator: if the curve is set wrong, the term is mismatched, or the liquidity is too thin, the quotes will be distorted.
To judge whether TermMax is actually useful, I’d rather look at real filled depth, slippage, and two-sided interest spreads—not just the highest APR.
#termmax @TermMax
Market makers or Curators can split the funds into multiple ranges, set APR boundaries and capacity for each segment; as orders get filled, the interest rate changes along the curve.
In the same market, you can also have borrowing, lending, or two-way orders coexisting. It’s like tiered wholesale pricing—only the “goods” are the right to use funds for a certain period.
It can be simplified to APR = f(q, t): q is the filled quantity, and t is the remaining time to maturity. Different intervals use different curve parameters. The theoretical interest spread for two-way market making is Δr = lending APR − borrowing APR, but it’s not net profit—you still have to account for idle capital, fees, price volatility, and the risk of bad debts. The closer an order is to the next range, the marginal interest rate may also change.
I think this design is more suitable than a single fund pool for fixed-term markets, because both the maturity and depth can be reflected in the price. But free (curved) pricing also shifts responsibility to the Curator: if the curve is set wrong, the term is mismatched, or the liquidity is too thin, the quotes will be distorted.
To judge whether TermMax is actually useful, I’d rather look at real filled depth, slippage, and two-sided interest spreads—not just the highest APR.
#termmax @TermMax