Mortgage BTC to borrow USDT? When the interest rate is 4%, you think it’s a good deal. But when it climbs to 11%, you’ll find out what “pain” really means.
At the beginning of the year, I collateralized some WBTC on Aave and borrowed USDC to keep things moving. The floating interest rate was 3.8% at the time, and I didn’t think much of it. Three months later, the bill came out—and I saw that for a few days the rate had spiked to over 9%. The interest during those days basically ate a chunk of my profit.
After that, I started looking for alternatives.
When I was browsing TermMax, I saw an update: they launched the first fixed-rate lending market that supports tokenized stocks as collateral—Apple, Tesla, and other US stock tokens can all be used to pledge.
What does that have to do with me? I don’t even have US stocks.
But what it made me think about was something else: if you have BTC or ETH, what’s the biggest fear when doing collateralized borrowing? Interest rates jumping up. TermMax’s logic is—when you enter the position, the borrowing cost for the entire period is locked in. The moment you sell XT (the yield token), the amount of interest you’ll pay in the future is already set. Market fluctuations don’t matter to you.
What’s the trade-off? You give up the chance to pay less if interest rates fall.
If a floating rate drops from 4% to 2%, locking at 4% means you lose. But if it rises from 4% to 15%, locking at 4% means you profit. In the past few months, Aave’s USDC interest rate had 37 days above 8%—so which side are you betting on?
Now TermMax also adds another option: use tokenized stock as collateral to borrow with a fixed-rate loan. This means people holding stock tokens don’t have to sell their stocks to get stable funding—which is a brand-new liquidity exit for those holding RWA assets.
Are you the kind of person willing to pay a bit more for “certainty,” or the kind who bets that rates will drop? Comment below. @TermMax #termmax
At the beginning of the year, I collateralized some WBTC on Aave and borrowed USDC to keep things moving. The floating interest rate was 3.8% at the time, and I didn’t think much of it. Three months later, the bill came out—and I saw that for a few days the rate had spiked to over 9%. The interest during those days basically ate a chunk of my profit.
After that, I started looking for alternatives.
When I was browsing TermMax, I saw an update: they launched the first fixed-rate lending market that supports tokenized stocks as collateral—Apple, Tesla, and other US stock tokens can all be used to pledge.
What does that have to do with me? I don’t even have US stocks.
But what it made me think about was something else: if you have BTC or ETH, what’s the biggest fear when doing collateralized borrowing? Interest rates jumping up. TermMax’s logic is—when you enter the position, the borrowing cost for the entire period is locked in. The moment you sell XT (the yield token), the amount of interest you’ll pay in the future is already set. Market fluctuations don’t matter to you.
What’s the trade-off? You give up the chance to pay less if interest rates fall.
If a floating rate drops from 4% to 2%, locking at 4% means you lose. But if it rises from 4% to 15%, locking at 4% means you profit. In the past few months, Aave’s USDC interest rate had 37 days above 8%—so which side are you betting on?
Now TermMax also adds another option: use tokenized stock as collateral to borrow with a fixed-rate loan. This means people holding stock tokens don’t have to sell their stocks to get stable funding—which is a brand-new liquidity exit for those holding RWA assets.
Are you the kind of person willing to pay a bit more for “certainty,” or the kind who bets that rates will drop? Comment below. @TermMax #termmax