so the FT token, the one you get on the lending side, works basically like a zero-coupon bond. you buy it under face value now, hold it, and at maturity it redeems at full face value.
no coupon payments along the way, the whole return is just the gap between what you paid and what you get back.
it's such a simple idea but seeing it actually work on-chain, with a real maturity date and a real redemption, hit different than reading about it in a finance textbook years ago.
what really got me was pulling up markets with different maturities side by side. a 30 day market is pricing a different rate than a 90 day one, and that gap isn't random, it's the market telling you something about where people expect rates to go. that's a yield curve, just built out of separate
TermMax order books instead of one continuous chart. short end pricing lower usually means people expect stability near term, longer end pricing higher can mean people want extra compensation for locking up longer. I caught myself just scrolling through maturities like I was reading tea leaves lol.
what I like is you don't need to trust anyone's promise on this. the rate is set the moment you enter, printed into the FT itself, nobody can quietly change it on you later.
feels like the closest thing DeFi has gotten to an actual bond market instead of just slapping "fixed" on a variable product and hoping nobody checks.
#termmax @TermMax
no coupon payments along the way, the whole return is just the gap between what you paid and what you get back.
it's such a simple idea but seeing it actually work on-chain, with a real maturity date and a real redemption, hit different than reading about it in a finance textbook years ago.
what really got me was pulling up markets with different maturities side by side. a 30 day market is pricing a different rate than a 90 day one, and that gap isn't random, it's the market telling you something about where people expect rates to go. that's a yield curve, just built out of separate
TermMax order books instead of one continuous chart. short end pricing lower usually means people expect stability near term, longer end pricing higher can mean people want extra compensation for locking up longer. I caught myself just scrolling through maturities like I was reading tea leaves lol.
what I like is you don't need to trust anyone's promise on this. the rate is set the moment you enter, printed into the FT itself, nobody can quietly change it on you later.
feels like the closest thing DeFi has gotten to an actual bond market instead of just slapping "fixed" on a variable product and hoping nobody checks.
#termmax @TermMax