#termmax @TermMax
Today I reread the TermMax liquidation documents again, and when I saw the lines about physical settlement, I suddenly got stuck.
The official says that if they haven’t liquidated everything by the end of the liquidation window, they’ll just transfer the collateral to the lender. It sounds like a safeguard. But if the collateral is tokenized stocks like Ondo’s, LRTs, or even stocks on the Robinhood Chain, once the lender takes possession, is the secondary market depth enough to instantly absorb it? How nasty would the slippage be? The document almost doesn’t say anything about what the lender is supposed to do “after they receive it.” The risk doesn’t disappear—it just gets pushed onto the lender.
That’s pretty different from Aave and Morpho. Aave uses public auctions, and the liquidation bot picks up the position. Morpho, while isolated, still relies on a mature liquidation ecosystem. TermMax uses physical settlement, and the party bearing the “last-mile” risk is totally different.
Look at the numbers, too. The official peak TVL is over 90 million, while DefiLlama’s current figure is roughly 31–39 million. Active borrowing is about 4.7 million. Idle capital automatically goes to Aave and Morpho to earn floating returns—pretty smart design—but it also makes total locked value and the depth that can actually be成交 instantly two different things. Yesterday I opened a few markets: some lending liquidity is only dozens to a few hundred U, while borrowing is hanging with tens of thousands.
Last month I ran a few loops on Aave, and the most annoying part is when the interest rate suddenly goes haywire. TermMax packages leverage into an NFT using GT—one-click execution, interest locked, and it really is comfortable. But the cost of that comfort is that lenders get an extra layer of uncertainty: “after a liquidation failure, you’ll have to handle the collateral yourself.”
Only six days left until TGE. Everyone is watching points and watching rankings—very few people want to think about how that pile of merely-average assets sitting in the lender’s hands during those days after a liquidation failure is supposed to be handled. I think that’s actually the most worth paying attention to.
Have you run real liquidations related to this? Or do you think I’m overthinking it?
Today I reread the TermMax liquidation documents again, and when I saw the lines about physical settlement, I suddenly got stuck.
The official says that if they haven’t liquidated everything by the end of the liquidation window, they’ll just transfer the collateral to the lender. It sounds like a safeguard. But if the collateral is tokenized stocks like Ondo’s, LRTs, or even stocks on the Robinhood Chain, once the lender takes possession, is the secondary market depth enough to instantly absorb it? How nasty would the slippage be? The document almost doesn’t say anything about what the lender is supposed to do “after they receive it.” The risk doesn’t disappear—it just gets pushed onto the lender.
That’s pretty different from Aave and Morpho. Aave uses public auctions, and the liquidation bot picks up the position. Morpho, while isolated, still relies on a mature liquidation ecosystem. TermMax uses physical settlement, and the party bearing the “last-mile” risk is totally different.
Look at the numbers, too. The official peak TVL is over 90 million, while DefiLlama’s current figure is roughly 31–39 million. Active borrowing is about 4.7 million. Idle capital automatically goes to Aave and Morpho to earn floating returns—pretty smart design—but it also makes total locked value and the depth that can actually be成交 instantly two different things. Yesterday I opened a few markets: some lending liquidity is only dozens to a few hundred U, while borrowing is hanging with tens of thousands.
Last month I ran a few loops on Aave, and the most annoying part is when the interest rate suddenly goes haywire. TermMax packages leverage into an NFT using GT—one-click execution, interest locked, and it really is comfortable. But the cost of that comfort is that lenders get an extra layer of uncertainty: “after a liquidation failure, you’ll have to handle the collateral yourself.”
Only six days left until TGE. Everyone is watching points and watching rankings—very few people want to think about how that pile of merely-average assets sitting in the lender’s hands during those days after a liquidation failure is supposed to be handled. I think that’s actually the most worth paying attention to.
Have you run real liquidations related to this? Or do you think I’m overthinking it?