#termmax @TermMax
Most protocol liquidations feel like a black box penalty but TermMax’s execution split serves two distinct structural functions. Whenever an LTV threshold is breached or a fixed maturity payment is missed, a 10% penalty applies to the liquidated debt. Instead of going into a black hole reserve 5% goes directly to liquidators to incentivize execution speed while the remaining 5% goes to the protocol reserve to capitalize systemic safety.
To prevent cascading dumps on large positions over $10,000 in debt, liquidations are capped at 50% per pass. If positions remain unclosed after that window, physical delivery kicks in, allowing FT holders to redeem directly from underlying and collateral pools. This failsafe is vital for lower liquidity assets especially with tokenized stock collateral onboarding like Ondo Global Markets.
Does the 50% single pass cap protect borrower equity better than a full liquidation or does it leave too much tail risk on the protocol during market volatility?🤷🏼♂️
#TermMax @TermMax
Most protocol liquidations feel like a black box penalty but TermMax’s execution split serves two distinct structural functions. Whenever an LTV threshold is breached or a fixed maturity payment is missed, a 10% penalty applies to the liquidated debt. Instead of going into a black hole reserve 5% goes directly to liquidators to incentivize execution speed while the remaining 5% goes to the protocol reserve to capitalize systemic safety.
To prevent cascading dumps on large positions over $10,000 in debt, liquidations are capped at 50% per pass. If positions remain unclosed after that window, physical delivery kicks in, allowing FT holders to redeem directly from underlying and collateral pools. This failsafe is vital for lower liquidity assets especially with tokenized stock collateral onboarding like Ondo Global Markets.
Does the 50% single pass cap protect borrower equity better than a full liquidation or does it leave too much tail risk on the protocol during market volatility?🤷🏼♂️
#TermMax @TermMax