#termmax @TermMax
The 80% MLTV number in TermMax’s documentation looks simple at first.
Take Alice’s example: she locks 2 ETH , with ETH valued at $1,000 each. With an 80% MLTV, she can issue up to 1,600 FT against that collateral. But she doesn't actually walk away with 1,600 USDC.
This is where #TermMax gets interesting.
Those 1,600 FT represent the total amount she is willing to repay at maturity. The example splits them into 1,530 FT of principal and 70 FT of interest, based on a matched borrowing rate of roughly 4.6%. The 70 interest FT are exchanged for 1,530 XT, which combines with the principal FT to redeem 1,530 USDC.
So Alice locks $2,000 of collateral, records $1,600 of debt, but initially receives $1,530 USDC.
And that creates the part I keep thinking about.
At maturity, she can repay the 1,600 USDC directly or potentially buy 1,600 FT from the market at a discount and use them to settle the debt.
If the market gives her a cheaper way to close the position, how much of that original fixed borrowing cost will she actually end up paying?
@TermMax #TermMax $ETH $USDC $TMX
The 80% MLTV number in TermMax’s documentation looks simple at first.
Take Alice’s example: she locks 2 ETH , with ETH valued at $1,000 each. With an 80% MLTV, she can issue up to 1,600 FT against that collateral. But she doesn't actually walk away with 1,600 USDC.
This is where #TermMax gets interesting.
Those 1,600 FT represent the total amount she is willing to repay at maturity. The example splits them into 1,530 FT of principal and 70 FT of interest, based on a matched borrowing rate of roughly 4.6%. The 70 interest FT are exchanged for 1,530 XT, which combines with the principal FT to redeem 1,530 USDC.
So Alice locks $2,000 of collateral, records $1,600 of debt, but initially receives $1,530 USDC.
And that creates the part I keep thinking about.
At maturity, she can repay the 1,600 USDC directly or potentially buy 1,600 FT from the market at a discount and use them to settle the debt.
If the market gives her a cheaper way to close the position, how much of that original fixed borrowing cost will she actually end up paying?
@TermMax #TermMax $ETH $USDC $TMX