#termmax In fixed-rate markets for @TermMax , people usually start by looking at two columns: the interest rate and the term length. But when I lay several parameters side by side, I find that what you should look at first is the collateral column—within the same debt market, switching to a different collateral asset can completely change the nature of the position. #TermMax
The documentation is blunt: for each market, you need to specify both the debt asset and the collateral asset, the maturity date, and two tiers of LTV. The Locked LTV that facilitates a deal determines the maximum leverage you can enter with, while the LLTV that triggers liquidation sets your risk floor. How wide the gap between these two LTVs really is comes down to the volatility of the collateral.
For collateral with high volatility, a small price twitch is enough to hit the liquidation line; for collateral with low volatility and good liquidity, your safety buffer is much thicker. Even for positions with the same maturity date and similar interest rates, differences in AUD volatility and market depth can make the probability of “lasting all the way to repayment” completely different.
You also need to pay attention to the asset path after liquidation. If, at maturity, the liquidation is not fully completed, physical delivery will hand you the underlying debt asset and the collateral asset proportionally, by share. That means what you ultimately get back may not be only principal plus interest—it could also include exposure to a specific collateral asset. How that collateral is “shaped” directly determines whether the bundle of assets you recover is actually worth anything.
So my ordering changed: the liquidity and volatility of the collateral come before the interest rate; the contents of the post-liquidation physical delivery come before the headline APR. Interest rates fluctuate up and down over time; when the collateral has problems, the losses can collapse all at once.
TermMax lists the collateral options clearly—that’s a good thing. But clarity doesn’t mean the risks are the same. The same instrument put behind different collateral is two completely different trades. Before picking a market, ask one question first: what is it using as the foundation.@TermMax $BTC