I came across mechanics at TermMax that made me look at the concept of liquidity differently.
A Two-Way Range Order allows one participant to set two pricing curves at once.
The first determines the rate at which they are willing to lend an asset.
The second determines the rate at which they are willing to borrow it.
A spread is formed between these two curves.
That is, the participant is effectively creating not one side of the market, but a small two-sided fixed-rate market within a single construct.
What I like here is precisely the change in the role of the liquidity provider.
They are not just waiting for someone to come and borrow their asset. At the same time, they set the terms for both directions of capital flow.
And this is already a completely different model:
borrow rate → spread → lending rate
The more I look at TermMax’s architecture, the more obvious it becomes that a Range Order is not just a way to provide liquidity.
It’s a way to define your own credit pricing model.
@TermMax #TermMax
A Two-Way Range Order allows one participant to set two pricing curves at once.
The first determines the rate at which they are willing to lend an asset.
The second determines the rate at which they are willing to borrow it.
A spread is formed between these two curves.
That is, the participant is effectively creating not one side of the market, but a small two-sided fixed-rate market within a single construct.
What I like here is precisely the change in the role of the liquidity provider.
They are not just waiting for someone to come and borrow their asset. At the same time, they set the terms for both directions of capital flow.
And this is already a completely different model:
borrow rate → spread → lending rate
The more I look at TermMax’s architecture, the more obvious it becomes that a Range Order is not just a way to provide liquidity.
It’s a way to define your own credit pricing model.
@TermMax #TermMax
