@TermMax #TermMax
One thing that didn’t make sense to me at first was why someone would leave a large lending order sitting on TermMax instead of taking the rate already available.
Then I looked at the trade-off. TermMax lets lenders name the minimum fixed rate they want, so a user with 500,000 USDC could post an order at 8% and simply wait for a borrower. Taking the market rate gets the capital working immediately, but it may also mean accepting worse pricing in a thin market. Waiting becomes a negotiation strategy.
That works especially well for larger players. They can afford to be patient, avoid pushing the rate against themselves, and use the size of their order as a signal to the market. Borrowers gain access to deeper liquidity, and TermMax gets a more useful order book. The disadvantage falls on users who value speed: a smaller lender may need to accept a lower rate, while an urgent borrower may have to pay more.
The numbers make this behavior worth watching. DeFiLlama tracks roughly $31.2 million in TermMax TVL and $27.3 million in active loans. A $500,000 order would equal around 1.6% of that tracked TVL, enough to influence how a market looks.
If more users decide their best move is to post an ambitious rate and wait, will that create better price discovery—or an order book that appears deep but rarely agrees on a price?
One thing that didn’t make sense to me at first was why someone would leave a large lending order sitting on TermMax instead of taking the rate already available.
Then I looked at the trade-off. TermMax lets lenders name the minimum fixed rate they want, so a user with 500,000 USDC could post an order at 8% and simply wait for a borrower. Taking the market rate gets the capital working immediately, but it may also mean accepting worse pricing in a thin market. Waiting becomes a negotiation strategy.
That works especially well for larger players. They can afford to be patient, avoid pushing the rate against themselves, and use the size of their order as a signal to the market. Borrowers gain access to deeper liquidity, and TermMax gets a more useful order book. The disadvantage falls on users who value speed: a smaller lender may need to accept a lower rate, while an urgent borrower may have to pay more.
The numbers make this behavior worth watching. DeFiLlama tracks roughly $31.2 million in TermMax TVL and $27.3 million in active loans. A $500,000 order would equal around 1.6% of that tracked TVL, enough to influence how a market looks.
If more users decide their best move is to post an ambitious rate and wait, will that create better price discovery—or an order book that appears deep but rarely agrees on a price?