#termmax @TermMax
When I first looked at fixed-income products, I was most easily swayed by the annualized figure on the homepage. The more eye-catching the numbers, the more I wanted to click and confirm. After researching @TermMax , I added a rule for myself: first break the returns into a bill, then decide whether to enter.
Let’s say I use 1000 USDC to buy a batch of FT at a trade price of 0.98, with settlement at 1 at maturity. If I hold to maturity, the gross earnings on paper are 20 USDC. This is just a demo algorithm, not TermMax’s current market quote. Next, I need to subtract on-chain fees generated from buying, approvals, and redemptions. When the amount is small, a few chunks of Gas can account for more than you’d expect.
I also add a section to this bill called “use the money early.” The FT’s fixed payoff is based on holding until maturity and a normal redemption process. If I sell mid-way, the execution price will depend on the interest rate at that time, the remaining tenor, and market depth. The annualized number shown on the page doesn’t change, but what I actually receive could be reduced by slippage and a discount. TermMax locks in the post-trade maturity price; the funding plan still has to be my responsibility.
Now when I look at TermMax, it records four numbers in sequence: how much I spend to buy the FT, how much I can redeem at maturity, how much total on-chain cost the full operation requires, and roughly how much price I’d give up to exit early. The first two form the gross return, and the last two determine the net return. Miss counting even one item, and those “beautiful APR” figures can be misleading.
This approach also helps me avoid a habit: to squeeze out a couple more percentage points of annualized yield, I’d put money I need in the short term into longer tenors. The longer the tenor, the more cushion my funding plan needs. I’d rather take slightly less than risk being forced to sell FT in a thin market when I suddenly need the money.
TermMax provides cash flows you can calculate in advance, but the calculation shouldn’t stop at the homepage. I plan to leave the fee-adjusted results from each trade, then compare how different tenors actually perform. For me, net returns that land in my wallet are more meaningful than the highest annualized figure in a screenshot. 🙂
When you’re looking at TermMax fixed-income offerings, do you also factor in Gas and early-exit costs together?
When I first looked at fixed-income products, I was most easily swayed by the annualized figure on the homepage. The more eye-catching the numbers, the more I wanted to click and confirm. After researching @TermMax , I added a rule for myself: first break the returns into a bill, then decide whether to enter.
Let’s say I use 1000 USDC to buy a batch of FT at a trade price of 0.98, with settlement at 1 at maturity. If I hold to maturity, the gross earnings on paper are 20 USDC. This is just a demo algorithm, not TermMax’s current market quote. Next, I need to subtract on-chain fees generated from buying, approvals, and redemptions. When the amount is small, a few chunks of Gas can account for more than you’d expect.
I also add a section to this bill called “use the money early.” The FT’s fixed payoff is based on holding until maturity and a normal redemption process. If I sell mid-way, the execution price will depend on the interest rate at that time, the remaining tenor, and market depth. The annualized number shown on the page doesn’t change, but what I actually receive could be reduced by slippage and a discount. TermMax locks in the post-trade maturity price; the funding plan still has to be my responsibility.
Now when I look at TermMax, it records four numbers in sequence: how much I spend to buy the FT, how much I can redeem at maturity, how much total on-chain cost the full operation requires, and roughly how much price I’d give up to exit early. The first two form the gross return, and the last two determine the net return. Miss counting even one item, and those “beautiful APR” figures can be misleading.
This approach also helps me avoid a habit: to squeeze out a couple more percentage points of annualized yield, I’d put money I need in the short term into longer tenors. The longer the tenor, the more cushion my funding plan needs. I’d rather take slightly less than risk being forced to sell FT in a thin market when I suddenly need the money.
TermMax provides cash flows you can calculate in advance, but the calculation shouldn’t stop at the homepage. I plan to leave the fee-adjusted results from each trade, then compare how different tenors actually perform. For me, net returns that land in my wallet are more meaningful than the highest annualized figure in a screenshot. 🙂
When you’re looking at TermMax fixed-income offerings, do you also factor in Gas and early-exit costs together?