One thing I’m realizing about DeFi yield:
APY is probably one of the least interesting numbers by itself.
The more important question is how that APY is being produced.
Looking at @TermMax is Vault and Curator model made this much clearer to me.
Capital isn’t simply deposited and left to chase the highest return.
Someone has to decide where the capital goes, which maturity to take, what liquidity trade-off is acceptable, and how much risk the strategy should carry.
That changes how I think about fixed-rate lending.
A higher yield can look attractive until you consider:
• liquidity
• maturity
• market conditions
• capital concentration
• withdrawal timing
A vault can make the experience passive for the user, but the underlying decisions are anything but passive.
And that’s the part I find interesting about TermMax.
The real test won’t be when markets are calm and liquidity is abundant.
It will be when volatility spikes, maturities diverge, and many users want their capital back at the same time.
That’s when the difference between a good-looking APY and a well-designed strategy becomes obvious.
@TermMax #termmax
APY is probably one of the least interesting numbers by itself.
The more important question is how that APY is being produced.
Looking at @TermMax is Vault and Curator model made this much clearer to me.
Capital isn’t simply deposited and left to chase the highest return.
Someone has to decide where the capital goes, which maturity to take, what liquidity trade-off is acceptable, and how much risk the strategy should carry.
That changes how I think about fixed-rate lending.
A higher yield can look attractive until you consider:
• liquidity
• maturity
• market conditions
• capital concentration
• withdrawal timing
A vault can make the experience passive for the user, but the underlying decisions are anything but passive.
And that’s the part I find interesting about TermMax.
The real test won’t be when markets are calm and liquidity is abundant.
It will be when volatility spikes, maturities diverge, and many users want their capital back at the same time.
That’s when the difference between a good-looking APY and a well-designed strategy becomes obvious.
@TermMax #termmax