I used to think that TermMax is just a secondary market for fixed-rate bond assets—FT gets traded like bonds, and XT gets split into interest-like cash flows. Clever, sure, but not to the point of making me slap my thigh.
Until I worked through the Curator logic in V2, and one sentence suddenly popped into my head: this isn’t a lending protocol—it’s putting a market maker on the spot.
Look at it this way: V2’s move is really shady. Limit Orders are laid out across the whole floor. The borrower posts the highest acceptable rate, while the lender posts the lowest acceptable rate. On the surface, it returns pricing power to users. In reality, it chops up what the original LP used to handle and feeds it to the market in fragments. Back then, LPs relied on information asymmetry and their scale to skim the spread. Now that Range Orders are out, the Curator—armed with algorithms—scours the market for the optimal combination. If your quoted price is even a bit greedy, the order gets routed straight to Old Man Zhang’s order next door.
I even went digging into the testnet data—there’s a detail that’s pretty telling. For the exact same 7-day USDC lending, the weighted average interest rate assembled via Range Orders is about 8–12 basis points lower than going directly through the AMM pool. Those 8 basis points don’t sound like much, but for old-timers doing high-frequency lending, that’s the lifeblood of profit being forcibly shaved off.
Of course, people will counter: the pools are shallow now. A few tens of thousands of dollars could easily punch a big hole in liquidity. Maybe the “optimal” rates you’re talking about are just the one crooked tree in a liquidity desert.
I’ll admit I agree with half of that.
So right now, I’m not watching TVL or trading volume. I’m only looking at three things: first, whether the discount rates of FT across different maturities can connect into a smooth curve; second, whether the order-book depth on both the buy and sell sides is steadily getting thicker as time goes on; third, whether the XT implied yield versus the outside floating-rate basis is continuously narrowing and stabilizing. If these three hold up—strong and steady—then it means the market truly treats rates as rates, not a bunch of people using the left hand to move points to the right.
TermMax still can’t carry the banner of a “rate exchange.” But with this V2 scalpel, at least it cuts open the festering wound. What comes next is up to the market itself to grow the flesh. #termmax @TermMax
Until I worked through the Curator logic in V2, and one sentence suddenly popped into my head: this isn’t a lending protocol—it’s putting a market maker on the spot.
Look at it this way: V2’s move is really shady. Limit Orders are laid out across the whole floor. The borrower posts the highest acceptable rate, while the lender posts the lowest acceptable rate. On the surface, it returns pricing power to users. In reality, it chops up what the original LP used to handle and feeds it to the market in fragments. Back then, LPs relied on information asymmetry and their scale to skim the spread. Now that Range Orders are out, the Curator—armed with algorithms—scours the market for the optimal combination. If your quoted price is even a bit greedy, the order gets routed straight to Old Man Zhang’s order next door.
I even went digging into the testnet data—there’s a detail that’s pretty telling. For the exact same 7-day USDC lending, the weighted average interest rate assembled via Range Orders is about 8–12 basis points lower than going directly through the AMM pool. Those 8 basis points don’t sound like much, but for old-timers doing high-frequency lending, that’s the lifeblood of profit being forcibly shaved off.
Of course, people will counter: the pools are shallow now. A few tens of thousands of dollars could easily punch a big hole in liquidity. Maybe the “optimal” rates you’re talking about are just the one crooked tree in a liquidity desert.
I’ll admit I agree with half of that.
So right now, I’m not watching TVL or trading volume. I’m only looking at three things: first, whether the discount rates of FT across different maturities can connect into a smooth curve; second, whether the order-book depth on both the buy and sell sides is steadily getting thicker as time goes on; third, whether the XT implied yield versus the outside floating-rate basis is continuously narrowing and stabilizing. If these three hold up—strong and steady—then it means the market truly treats rates as rates, not a bunch of people using the left hand to move points to the right.
TermMax still can’t carry the banner of a “rate exchange.” But with this V2 scalpel, at least it cuts open the festering wound. What comes next is up to the market itself to grow the flesh. #termmax @TermMax