#termmax Bought 200 USDC worth of the TermMax 60-day market’s XT just to figure out exactly how this thing loses value day by day. When I opened the position, the XT price was 0.041; by the fifth day it was 0.037. In four days it evaporated by 9.7%—the decay rate was even more straightforward than I expected.
XT is the time value of a debt split. The borrower collateralizes assets to mint FT and XT, sells the discounted FT for cash, and the XT flows to the secondary market. 1 unit of FT plus 1 unit of XT equals 1 unit of debt—so the books are always balanced. At maturity, FT redeems at face value, XT goes to zero, with no exceptions, and no one has to do anything malicious.
The logic of buying XT is close to Pendle’s YT: using a small amount of principal to leverage a large notional exposure. You’re betting that the portion where underlying floating yield outperforms the fixed end will be the profit. My $200 corresponds to a notional exposure of about 4,800—so the leverage multiple is a bit over twenty times. On paper, it really does look exciting. $SPCXB
But the direction cuts both ways, and the downside is just as fast. As long as the underlying floating yield remains below the implied fixed rate I locked in at my entry until maturity, XT is a ticket that will deterministically go to zero. I calculated the breakeven: the floating side needs to average above 6.4% for me not to lose money. But right now it’s 5.1%, which means I entered right into a headwind.
In the end, I treated this money as tuition rather than a position. XT isn’t something you buy and hold—it requires you to have a clear view on floating interest rates and be willing to watch the countdown to the maturity date. If you want fixed-income returns, you should buy FT; these two directions are completely opposite, and yet on the interface they’re separated by only one button.
#TermMax @TermMax $SNDKB