One mechanism in TermMax that is worth understanding is what happens when a loan reaches a liquidation event.
Liquidation can be triggered when a loan reaches its LLTV threshold. If a borrower does not repay by maturity, the loan also becomes available for liquidation.
If the loan remains unpaid after the liquidation window, TermMax uses physical delivery. FT holders can redeem through a pool containing both underlying and collateral tokens, receiving a proportional distribution.
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