Two-Way Range Orders are a game-changer for fixed-rate DeFi. Capturing the rate spread by market making both sides simultaneously is peak capital efficiency @TermMax!
Post
Beyond Horizon
·
--
#termmax @TermMax
Most people think of lending and borrowing as separate actions.
You're either a lender earning yield, or a borrower paying interest. Pick a side.
TermMax quietly breaks that assumption with something called a Two-Way Range Order.
It's a single order with two pricing curves. One for borrowing. One for lending. Both active at the same time.
Here's the mechanic:
Set a borrowing curve at 3–5%. Higher rates for the initial portion matched, lower for subsequent portions.
Set a lending curve at 6–8%. Lower rates for the initial portion matched, higher for subsequent portions.
Now you're not a borrower or a lender. You're a market maker.
If a lending taker fills your borrowing curve, you borrow at 3–5%. If a borrowing taker fills your lending curve, you lend at 6–8%.
The spread between those curves is your profit margin.
This is exactly how bond market makers operate in tradfi. They quote both sides — bid and ask — and earn the difference. The bid-ask spread on credit, made native to DeFi.
What makes it interesting is the dynamic adjustment. When one side fills, you shift roles automatically. Borrowing curve hit? You're now a borrower with debt recorded in your GT. Lending curve hit? You're a lender accumulating FTs.
One order. Both roles. Constant spread capture.
The obvious question is risk. If the market moves hard in one direction, you could end up heavily weighted on one side. The spread isn't free money — it's compensation for providing liquidity and absorbing inventory risk.
But that's true for every market maker, in every market. What's notable is that TermMax made this accessible to individual users, not just institutional desks.
The fixed rate gets the headlines. The FT gets the bond analogies. But the Two-Way Range Order is where TermMax stops being a lending protocol and starts becoming a credit market.
The question I keep coming back to: how wide does the spread need to be to compensate for the inventory risk? 2%? 5%? More?
Anyone actually running two-way orders on TermMax? What spread are you targeting?
Most people think of lending and borrowing as separate actions.
You're either a lender earning yield, or a borrower paying interest. Pick a side.
TermMax quietly breaks that assumption with something called a Two-Way Range Order.
It's a single order with two pricing curves. One for borrowing. One for lending. Both active at the same time.
Here's the mechanic:
Set a borrowing curve at 3–5%. Higher rates for the initial portion matched, lower for subsequent portions.
Set a lending curve at 6–8%. Lower rates for the initial portion matched, higher for subsequent portions.
Now you're not a borrower or a lender. You're a market maker.
If a lending taker fills your borrowing curve, you borrow at 3–5%. If a borrowing taker fills your lending curve, you lend at 6–8%.
The spread between those curves is your profit margin.
This is exactly how bond market makers operate in tradfi. They quote both sides — bid and ask — and earn the difference. The bid-ask spread on credit, made native to DeFi.
What makes it interesting is the dynamic adjustment. When one side fills, you shift roles automatically. Borrowing curve hit? You're now a borrower with debt recorded in your GT. Lending curve hit? You're a lender accumulating FTs.
One order. Both roles. Constant spread capture.
The obvious question is risk. If the market moves hard in one direction, you could end up heavily weighted on one side. The spread isn't free money — it's compensation for providing liquidity and absorbing inventory risk.
But that's true for every market maker, in every market. What's notable is that TermMax made this accessible to individual users, not just institutional desks.
The fixed rate gets the headlines. The FT gets the bond analogies. But the Two-Way Range Order is where TermMax stops being a lending protocol and starts becoming a credit market.
The question I keep coming back to: how wide does the spread need to be to compensate for the inventory risk? 2%? 5%? More?
Anyone actually running two-way orders on TermMax? What spread are you targeting?
Disclaimer: Includes third-party opinions. No advice. Binance AI may be used without guarantee. See T&Cs.