#termmax @TermMax the worst thing ever happened to me short $ENA yesterday now it's among the gainers trade still going on in loss but I Kept reading @TermMax market parameters today and one tiny distinction made more sense the second time through: MLTV and LLTV arent the same threshold.
MLTV controls how much can initially be borrowed against collateral. LLTV sits further out and is where liquidation actually triggers if the loan's LTV reaches or crosses it.
So theres intentionally some room between “maximum borrowing” and “liquidate this position.”
That gap is the interesting part.
TermMax could theoretically let borrowing run right up against the liquidation boundary, but then a relatively small collateral move could push a newly created position straight into trouble. MLTV instead leaves a buffer before LLTV.
Makes sense. But that buffer isnt permanent protection. Collateral can fall or the debt token can rise, eating through the distance between those thresholds.
I spent a while thinking about whether users will treat MLTV as a safety number when mechanically its really an entry constraint. The liquidation boundary is still LLTV.
Does separating MLTV from LLTV create enough useful breathing room for borrowers, or can the existence of that buffer make the position feel safer than it actually is?? @TermMax #TermMax $ENA
MLTV controls how much can initially be borrowed against collateral. LLTV sits further out and is where liquidation actually triggers if the loan's LTV reaches or crosses it.
So theres intentionally some room between “maximum borrowing” and “liquidate this position.”
That gap is the interesting part.
TermMax could theoretically let borrowing run right up against the liquidation boundary, but then a relatively small collateral move could push a newly created position straight into trouble. MLTV instead leaves a buffer before LLTV.
Makes sense. But that buffer isnt permanent protection. Collateral can fall or the debt token can rise, eating through the distance between those thresholds.
I spent a while thinking about whether users will treat MLTV as a safety number when mechanically its really an entry constraint. The liquidation boundary is still LLTV.
Does separating MLTV from LLTV create enough useful breathing room for borrowers, or can the existence of that buffer make the position feel safer than it actually is?? @TermMax #TermMax $ENA
