#termmax @TermMax
I assumed a liquidation either fully resolves a bad loan or it doesn't happen at all. Nothing in between, nothing left hanging.
That assumption fell apart once I read the actual trigger condition. Physical delivery isn't a separate, optional safeguard — the docs state it activates automatically whenever a loan remains unpaid or only partially liquidated after the two-hour liquidation window closes. It's a direct continuation of the same failed process, not a backup plan sitting off to the side.
Here's the mechanism once it fires: instead of trying to force a sale through potentially thin liquidity, lenders receive a proportional share of the borrower's actual collateral directly — not cash, not a synthetic payout, the underlying asset itself, split according to each lender's FT holdings.
This reframes what "unresolved" means on TermMax. Standard liquidation assumes there's enough liquidity to execute cleanly within that two-hour window. Physical delivery is what happens the moment that assumption breaks — the position doesn't just sit frozen, ownership of the actual collateral transfers instead.
What the docs don't say is how often partial liquidations actually escalate into physical delivery versus resolving cleanly inside the window.
The real test for TMX is whether lenders receiving raw collateral instead of cash actually protects them, or just shifts the liquidity problem from the protocol onto the lender.
Anyone tracked a real physical delivery event on TermMax?
I assumed a liquidation either fully resolves a bad loan or it doesn't happen at all. Nothing in between, nothing left hanging.
That assumption fell apart once I read the actual trigger condition. Physical delivery isn't a separate, optional safeguard — the docs state it activates automatically whenever a loan remains unpaid or only partially liquidated after the two-hour liquidation window closes. It's a direct continuation of the same failed process, not a backup plan sitting off to the side.
Here's the mechanism once it fires: instead of trying to force a sale through potentially thin liquidity, lenders receive a proportional share of the borrower's actual collateral directly — not cash, not a synthetic payout, the underlying asset itself, split according to each lender's FT holdings.
This reframes what "unresolved" means on TermMax. Standard liquidation assumes there's enough liquidity to execute cleanly within that two-hour window. Physical delivery is what happens the moment that assumption breaks — the position doesn't just sit frozen, ownership of the actual collateral transfers instead.
What the docs don't say is how often partial liquidations actually escalate into physical delivery versus resolving cleanly inside the window.
The real test for TMX is whether lenders receiving raw collateral instead of cash actually protects them, or just shifts the liquidity problem from the protocol onto the lender.
Anyone tracked a real physical delivery event on TermMax?