#termmax @TermMax
I mean, @TermMax caught my attention for a Question . So, I was reading a bit about TermMax, and question kept coming to mind.... Why is fixed rates so important in DeFi ? Hmm !
Yes, Listen, In the normal lending market, your calculations also change when the rate changes. But here TermMax has arranged the matter a little differently. FT is a discount bond, which can be bought below par and redeemed at a 1:1 ratio at maturity. GT is the NFT of your debt position, and XT is the interest obligation associated with the FT. It sounds simple, but it seems that the real thing lies within this structure. If you know in advance how much the position is being taken and how the settlement will be at maturity, then capital planning becomes much more straightforward. The subject is quite fascinating ! Isn't it ?
But to be honest, I stopped at one point. When you hear fixed rate, the matter seems very simple, but in reality, how useful this predictability will be will depend on market conditions and liquidity. Because just having a fixed rate does not eliminate all uncertainty. And the fixed-term part here is also quite interesting to me. Even if the market rate moves around, you can hold on to the terms you have taken a position on. Of course, this does not mean that there is no risk at all. Market movement, liquidity and protocol-level issues are still important. However, if you think about it, @TermMax is taking a rather interesting direction as an attempt to bring the fixed-rate concept of traditional finance to the On-Chain environment.
Finally, my question is:
If DeFi wants to be more predictable, can the fixed-rate market be an important part of it?
Hmm, I'm thinking about this aspect of $TMX now🤔
I mean, @TermMax caught my attention for a Question . So, I was reading a bit about TermMax, and question kept coming to mind.... Why is fixed rates so important in DeFi ? Hmm !
Yes, Listen, In the normal lending market, your calculations also change when the rate changes. But here TermMax has arranged the matter a little differently. FT is a discount bond, which can be bought below par and redeemed at a 1:1 ratio at maturity. GT is the NFT of your debt position, and XT is the interest obligation associated with the FT. It sounds simple, but it seems that the real thing lies within this structure. If you know in advance how much the position is being taken and how the settlement will be at maturity, then capital planning becomes much more straightforward. The subject is quite fascinating ! Isn't it ?
But to be honest, I stopped at one point. When you hear fixed rate, the matter seems very simple, but in reality, how useful this predictability will be will depend on market conditions and liquidity. Because just having a fixed rate does not eliminate all uncertainty. And the fixed-term part here is also quite interesting to me. Even if the market rate moves around, you can hold on to the terms you have taken a position on. Of course, this does not mean that there is no risk at all. Market movement, liquidity and protocol-level issues are still important. However, if you think about it, @TermMax is taking a rather interesting direction as an attempt to bring the fixed-rate concept of traditional finance to the On-Chain environment.
Finally, my question is:
If DeFi wants to be more predictable, can the fixed-rate market be an important part of it?
Hmm, I'm thinking about this aspect of $TMX now🤔