#termmax @TermMax I’ve been looking more closely at how @TermMax approaches lending risk, and the interesting part is that it’s not just about setting an LTV number.
MLTV determines how much a user can borrow upfront, while LLTV defines the point where liquidation risk starts to become real. That gap creates a buffer, but the broader risk framework matters just as much.
TermMax adds several layers around it:
• Fixed-term markets
• Partial liquidations
• 10% liquidation penalty
• Vault capacity limits
• Market whitelists
• Curators and timelocks
Then there’s the physical delivery fallback.
If a position can’t be fully liquidated, lenders may receive a pro-rata share of the underlying collateral. That can reduce the risk of bad debt, but it also shifts the outcome: instead of receiving purely liquid assets, lenders could end up holding collateral they didn’t originally want.
That’s the trade-off I find most interesting.
Higher LTVs can improve capital efficiency and utilization, but leave less room for volatility. More conservative parameters can provide stronger protection, but potentially slow market growth.
So for me, the bigger question isn’t simply “what is the LTV?”
It’s how those parameters change as each @TermMax market develops and liquidity becomes deeper.
Risk management is ultimately about finding that balance.
DYOR. Not financial advice.
#TermMax $TMX
MLTV determines how much a user can borrow upfront, while LLTV defines the point where liquidation risk starts to become real. That gap creates a buffer, but the broader risk framework matters just as much.
TermMax adds several layers around it:
• Fixed-term markets
• Partial liquidations
• 10% liquidation penalty
• Vault capacity limits
• Market whitelists
• Curators and timelocks
Then there’s the physical delivery fallback.
If a position can’t be fully liquidated, lenders may receive a pro-rata share of the underlying collateral. That can reduce the risk of bad debt, but it also shifts the outcome: instead of receiving purely liquid assets, lenders could end up holding collateral they didn’t originally want.
That’s the trade-off I find most interesting.
Higher LTVs can improve capital efficiency and utilization, but leave less room for volatility. More conservative parameters can provide stronger protection, but potentially slow market growth.
So for me, the bigger question isn’t simply “what is the LTV?”
It’s how those parameters change as each @TermMax market develops and liquidity becomes deeper.
Risk management is ultimately about finding that balance.
DYOR. Not financial advice.
#TermMax $TMX