The more I look at TermMax, the more I think the fixed rate is only one part of the story.
The interesting part starts when the market changes and you no longer want to hold the position until maturity.
You lock in a rate and everything looks simple at first. But weeks later, rates can move, liquidity can change, and the position may no longer fit what you want.
That’s where the transferable FT becomes important.
Instead of waiting for the loan to expire, the claim can move through a secondary market.
But pricing it isn’t simple.
An FT has time attached to it. A claim with 20 days left is very different from one with 200 days left. Add changing rates, collateral risk and liquidity, and suddenly the market has to answer a much harder question: what is this claim actually worth right now?
That’s why TermMax’s pricing curve and AMM are worth watching.
And the secondary market may help borrowers too. If an FT trades below face value, buying it back could become another way to manage the debt.
So for me, the real experiment isn’t the fixed rate.
It’s whether the debt remains useful, liquid and tradeable after the initial excitement is gone.
That’s where a DeFi primitive proves itself.
#termmax @TermMax
The interesting part starts when the market changes and you no longer want to hold the position until maturity.
You lock in a rate and everything looks simple at first. But weeks later, rates can move, liquidity can change, and the position may no longer fit what you want.
That’s where the transferable FT becomes important.
Instead of waiting for the loan to expire, the claim can move through a secondary market.
But pricing it isn’t simple.
An FT has time attached to it. A claim with 20 days left is very different from one with 200 days left. Add changing rates, collateral risk and liquidity, and suddenly the market has to answer a much harder question: what is this claim actually worth right now?
That’s why TermMax’s pricing curve and AMM are worth watching.
And the secondary market may help borrowers too. If an FT trades below face value, buying it back could become another way to manage the debt.
So for me, the real experiment isn’t the fixed rate.
It’s whether the debt remains useful, liquid and tradeable after the initial excitement is gone.
That’s where a DeFi primitive proves itself.
#termmax @TermMax